FIRST CUT IS THE DEEPEST:

Whether Uncle Ben cuts rates 1/2 point or two 1/4 points, economists and analysts end-to-end will still not reach an opinion about market direction - as usual, the technicals: Price, Volume, Trend momentum, are the things to watch. In a small sampling of rate cuts over almost 40 years, Laszlo Birinyi observes that 7 of 9 resulted in up markets shortly after, although (nota bene) there was an 18% decline in 2001. The average gain for 3 months was 5.5%; after 6 months , over 12% - and the seasonal timing is on its favor.
Implied Volatility in options is already at a 4-year high, and Tuesday's news on rates and broker earnings could even widen that.
In apprehension of this, trading volume has receded and sentiment indicators have regressed from their Bullish position a bit. Although still young, the revised ISEE call to put ratio seems to correlate pretty well, as its high 177 level preceded the decline of 2 weeks ago and its swing to 118 has seen a slow market rise; the opposite CBOE put/call ratio remains Bullishly high at 68, off its 71 mark.
The AAII and I.I. surveys have swung back to neutral/complacent; the Birinyi bloggers, in early testing, seem to be more prescient than contrary - their new high of 50 negative certainly "Bears" watching, as does the huge decline in Public shorting. Money continues to flow back into money market funds, and CEO insider selling has picked up again.
Here are all the numbers:

Mktsentiment. 9/14/2007 Last Week..... .5Yr.HI...... LOW

DJIA ………. 13442……….13113………14001..............7286
Nasdaq………. 2602…………2565……….. 2707.............1114
S&P500…….. 1484…………1453…………1557……..776
CBOE Eq. put/call …68…………..69………… 91…..........46-1/03

VIX ………. 24.9…………26.2………44 9/02........10.0-7/05

ISEE-call/put ……. 118………….177………..177………..118
All Equities (ETF)
McClel Osc…………31……………21………91-5/04.........(81)-5/04
McClelSum………-246………….-370…………..1568-6/03.......(917)

Newsletter Surveys:
Inv.Intel -Bull:…..…. 48.3………..42.9………..62.9-12/04......35-6/06
Bear:………… 31.0………….37.4………… 38.2-3/03.......16-6/03

AAII-Bull/Bear ……40/35.3………38.4/42.4……..n/a n/a
MarketVane Bulls…. 58………….59…………. 74..............24
UBS investor confidence..73………..87……………178……………53
IBD: Short Interest- …7.41…………7.0….………8.25………. 4.0
Public/NYSE Spec.-…..7.85…………12.9…..……18.25……….1.0
Birinyi Blogger
Bull/Bear Poll ……26.9/50…………31.3/40.6
Bullish%- ………...54……………52……….…88 -2/04...... 46-8/04
*Insider corporate sellers..22:1………30:1

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FIRST CUT IS THE DEEPEST: