On the eve before the big Fed meeting, many are speculating there will be an interest rate hike to offset the 'horror show' the Fed has created with our current stock market bubble.

It is widely recognized that Fed policy up to now has driven stock prices to record levels.

My own personal view is that a correction this year was overdue and the statements of Fed officials that a rate increase at the September 16th meeting is still likely will keep markets volatile.

There is real uncertainty about the Fed and about whether a rate hike will result in a sea change in the ongoing disconnect between stock market prices and the real world.

It's prudent at this time to increase your cash position to 15%, take all long term gains, set trailing stop loss orders on all low dividend/interest paying holdings, increase your gold and silver positions to 15%, buy out of the money puts on ETFs that best mirror their remaining exposed positions, and weigh buying some inverse ETFs to offset value declines in their remaining equity holdings.

September promises to be a wild month for the markets. And it will be interesting to see exactly what the Fed does and it's ripple effect.

To read the full article with more recommendations, visit http://www.weisseducation.com/its-time-to-go-to-defcon-2-1818.

Author's Bio: 

Richard Lehmann is publisher of the Forbes/Lehmann Income Securities Investor newsletter and a columnist with Forbes. He is Chairman and CEO of financial advisor Lehmann Livian Fridson Advisors LLC