Reversal Of Fortune

We knew from the start that it was going to be one ugly day. While they attempted to rally them this afternoon, those efforts failed miserably.

Already you can hear the cries for an emergency rate cut again upon growing fear of a reversal of fortune back to the August lows. With the S&P 500 now under 1490, I don't have to tell you that the picture looks grim.

Just to throw another money wrench into the mix, they're taking down Cisco Systems (CSCO) in after-hours trading following their earnings report. Remember, for the bears to take full control, I think they must take down the tech leaders. Most of the market is hiding there and the bulls aren't going to give up unless you bomb and completely destroy their safety shelter.

Along with everything else, we also have some more subprime disasters to sort through making for another interesting setup tomorrow. Given recent Fedspeak, it seems that the market is losing confidence & patience that Bernanke & Co. can save us. To be sure, weakness in what tends to be the sweet spot of the year for the bulls will do that, especially with performance pressure starting to mount ahead of bonus season.

All in all, emotions are high and, if I'm right, that's only going to get even more so in the days ahead if this kind of tape continues. As they say, let's hope for the best, be prepared for the worst, and expect to be surprised. Good advice in any market, but especially this one.