Waiting for Godot, Act #N

Well, it is time again to start the count down for the tomorrow's FOMC decision, or the lack of. Things are definitely getting dicer by the day on the Wall Street, as yet another attempt of technical rebound fizzled today. Today's decline might have more to do with the deflating bulls than the edgy bears who might be having flash backs on the beatings they took after previous Fed rate cuts.

As of the close today, several more key indices completed the 1-2-3 reversal, including: Russell2000, SP-Mid-Cap, and Dow-Transport. With DOW/SP500 only a stone-throw away from their Jan/Mar lows AND financials as a whole are at new low, it must be disheartening and discouraging for Big Ben and Co. right now. After all, the massive rate cut campaign, which was meant to save the financials, has not only failed miserably, but further fueled inflation flame along with the excessively injected liquidity. But perhaps the most tragic part of this odyssey is that unlike other central banks, no matter how much the Fed wants to, it just cannot raise the rate right now. Talking about quenching the thirst with poisonous liquor!

I gather many folks are ready to buy into this post-FOMC rally, especially the market is deeply oversold. But be very careful, especially if the Fed jacks up the hawkish tone, there are reasons while the technical rebound attempts have failed 2 days in a row.

Today's massive price raise from the DOW Chemical and India rate hike news are pushing me towards the "every rally must be sold down" mode. I probably won't be aggressively bottom fishing, unless I see a sizable drop (2-3% on major indices), and I probably will actively look for short setups if there is a 2-3% immediate jump of the major indices.

And oh, don't forget tomorrow's RIMM's ER in AH, it could be a kicker or spoiler for either bulls or bears party. Speaking of RIMM's ER, my plan right now is to use any post-ER jump as an opportunity to initiate short positions, why? just look at its weekly chart (hint, volume and other indicator bearish divergence).

Good luck to all for tomorrow, and trust me, you will need it (unless you sit out).