Biloxi Calm

Today's action was rather dull, as the market waits on the Big Wednesday Fed cut to come.

Shanghai bounced another 2.83% today, but so far there is no new high in that index. A higher-high this week wouldn't be at all surprising, but a lower-high failure would mean I can begin to scale-in short, so I am sleeping a bit lightly.

Over here, the NDX yawned its way to another intraday high today, but closed below that level. This is another case where if the index fails I am jumping in to short (this one with both hands). If not, I am resigned to wait.

I mentioned at the previous NDX high last week that only 7 out of 100 names managed new 52-wk highs. Again today there were 7. Digging further, in today's NHs only FLEX and WYNN ended with any clear advance. GOOG stayed positive (nothing special), VRSN was flat and the others, ATVI, DELL and YHOO, all backed-off notably; ending lower on the session.

What will the Fed do Wednesday? There is a 98% probability that they will cut the FF's rate by 25 basis points, based on today's close in the November Fed Funds futures contract. Only the Fed's choice of language when it makes the announcement to cut and the market response remain to be seen.

Oh yeah, the issue of the discount rate also remains. Talk about good times.

Will we blow-off on the upside, will we drop-dead immediately following the cut(s), or will we simply continue this perma-bull collar of upward crawl for the lifetimes to come?

Tomorrow I will address the potential for the market dropping like a stone following Wednesday's rate cut. I won't guarantee this will be the result, but too much is in place, fundamentally and technically, to ignore it. Also, dropping like a stone is where a trader can make the greatest gain in the least amount of time, so hell if I'm not going to be prepared when the market sets up the chance.

For now, I digress to watch more paint dry.