At the moment, we are pondering the market and the current set...

At the moment, we are pondering the market and the current set of events in light of both today’s Fed announcement and next week's Fed meeting on March 18th. As things presently stand, the Fed Fund futures are pricing in a .50 basis point cut for next week. The question of the day then becomes, “What happens if the Fed cuts .50 basis points, and that is what expectations are?” The point being, we are talking about another very large rate cut, and a wide perception ahead of time that this is what the Fed will do. Hence, we see the risk of the post rate-cut announcement rally being a serious wimp out, another fizzle, that is, if it happens at all. In our view, risk is high and rising that another bout of disappointment is in the offing, especially if “ALL” (cynically) the Fed does is cut .50 bps. Over the next few days, any retracement toward new lows in price followed by a second knee jerk bounce perhaps extending a day or two past the Fed meeting may be all we see from the stock market. That could then be followed, in turn, by a more violent and aggressive sell off to a serious bout of sequential new lows.