First, mall traffic is well below expectations.

The retailers are now hanging their hat on "last minute" shopping to "save" Christmas.

They obviously haven't figured out what "Declined" means on the XON machine yet.

They will.

The Fed cut 25/25. The market no likey. Now you know what an irrational market is like; you saw it today - the retail sheepies had priced in 50 bips, and when they didn't get it, down she went faster than "Monica on Bill".

Most telling, we broke 1500 on huge volume in the SPX, then blew through 1490 like a knife through butter. The A/D line went in the toilet instantly at more than 10:1 on the decline side.

This is one of the dangers of overreliance on chart analysis without paying attention to the macro picture. Overnight the last real resistance level in the SPX fell, and the chart kids came in this morning and start pushing things up into the announcement - thinking we were DEFINITELY going higher - all the way back to 1576.

Are you now disabused of the notion that "waves make the news"? If not, let me introduce you to an extra-large tube of Preparation "H", which you're going to be needing a lot more of during the next couple of months, as if today wasn't enough for you...... today, you got it raw - sorry.

Oh, and the next Fed meeting? End of January.

No more games until after the first of the year - now we're back to trading on the fundamentals, and the fundamentals suck. Period.

Next up are financial earnings and the fun here is that they're for the 4th quarter and thus must be audited. I would positively love to be a fly on the wall in the boardrooms of these firms right about now. If they've been "managing" their earnings the auditors will be putting a boot on some necks...... about what we need.

Back to The Fed for a minute.

There was much wailing and gnashing of teeth about the market not "getting its 50 bips of crack" today. Let me posit WHY BenDover didn't comply with the market's demands.

Its really simple: IT WON'T HELP.

Huh?

Yep. It will do nothing. The previous 75 bips have done nothing to ease the credit crunch, and no matter how much more Ben applies, it won't help.

That's because the problem isn't found in policy. Its found in fraud, avarice, lies and BS.

Trust cannot return to the lending system until all the garbage is taken back onto balance sheets, marked to market, and the truth is told.

The political costs of The Fed doing this, here and now, after Greenspan turned his head and ignored the game-playing for as long as he did are severe. They likely include failure of at least one, and perhaps several, large investment banks and a huge number of regional and local institutions.

There is an old saying in Washington DC - "If you touch it, any cock-up that results is YOURS!"

So here, as near as I can tell, is Ben's game plan.

• Respond only to short-term commercial credit demand (as The Fed always does with its policy rate) but ignore cries to do something "creative" to "fix" the problem, because the real fix isn't creative or ordinary - but it is simple.
• Don't attempt to mess with the obvious cock-up. If Ben was to issue regulations that these SIVs and such were to be repatriated and marked, he would own the resulting explosion.
• WHEN it blows up, you don't get blamed; "he cut rates", even if not as much as the crack addicts wanted. Greenspan might, Bush might, but Bernanke will not.

So how do you trade this?

Simple - we're in for a nasty, long period of time in the markets. Oh sure, there will be rallies, but there will also be plenty of drops like the one we had today. Being nimble will count.

I remain convinced that my original call from April is good - this will not be over until there is at least one major Wall Street investment bank that is either forcibly reorganized or fails outright.

In the meantime, enjoy the ride - Bear Markets are fun.

Here's your technical!