Federal Reserve Chairman, Ben Bernanke, is speaking again to the Senate banking committee today. There is a significant danger that Wednesday’s words were misinterpreted, as they were on a previous occasion. Misinterpretation creates the possibility of a big whipsaw reversal. I am positioning for that.

The media reported that interest rate hikes were ending, but that is doubtful. High and rising prices of oil and commodities plus a tight labor market create rising inflation pressures, which in Ben Bernanke’s own words, “would erode the performance of the real economy and would be costly to reverse. The Federal Reserve must take account of these risks in making its policy decisions.”

The way this will play out is far from certain.