The Morning Hammer: Will Yellen Pull a Fast One at Jackson Hole?

All eyes are on FOMC Chair Janet Yellen's 10:00 a.m. ET speech in Jackson Hole.

Fed officials have been out in force the past few weeks pushing a hawkish narrative, and the market has responded.

Fed fund futures now imply a 57% chance of a December rate hike, up from 47% a week ago and just 9% after the 6/24 Brexit.

57% is far from certain. However, the trend has been up, and the trend is what counts.

This has been pushing up bank stocks and putting pressure on gold, particularly the miners (GDX).

So now we're at an interesting juncture.

If Yellen indeed comes out hawkish as many traders expect, I wonder if we get an immediate spike in the dollar and dip in gold, with both moves getting reversed by the end of the day.

I almost feel like all the Fed heads have been overselling the idea that rate hikes are coming, which could set up a sell the news situation.

On the flip side, if we get a repeat of June — doves flying when everyone's looking for hawks — expect a monumental rally in GDX.

SPX futures are as flat as an ironing board, and crude oil is down fractionally.

Aside from all the Fed-sanity, I'm really interested to see what biotech does.

For 2 straight days, IBB has gone from first in the morning to worst in the afternoon on heavy volume. (see chart)

The alleged cause has been Presidential candidate Hillary Clinton's attacks on Mylan's (MYL) pricing practices, which raises fears about future price controls.

The reality is that no politician — not even the President of the United States — can simply wave a magic wand and lower drug prices.

So I wonder if traders have been looking for excuses to sell, and Hillary happened to serve it up.

IBB is down -16% on the year, but it's also up 19% from its February low.

We've also got GDP, U. of Michigan Sentiment, and the Baker Hughes Rig Count on the economic calendar.

So maybe, just maybe we'll get some excitement today after 34 days without a 1% move in SPX.