Conversational agents are increasingly becoming digital partners of our everyday computing experiences offering a variety of purposeful information and utility services. Although rich on competency, these agents are entirely oblivious to their users' situational and emotional context today and incapable of adjusting their interaction style and tone contextually. To this end, we present a mixed-method study that informs the design of a situation-and emotion-aware conversational agent for kinetic earables. We surveyed 280 users, and qualitatively interviewed 12 users to understand their expectation from a conversational agent in adapting the interaction style. Grounded on our findings, we develop a first-of-its-kind emotion regulator for a conversational agent on kinetic earable that dynamically adjusts its conversation style, tone, volume in response to users emotional, environmental, social and activity context gathered through speech prosody, motion signals and ambient sound. We describe these context models, the end-to-end system including a purpose-built kinetic earable and their real-world assessment. The experimental results demonstrate that our regulation mechanism invariably elicits better and affective user experience in comparison to baseline conditions in different real-world settings.