Last week, I went bearish prior to the Asian and European sell-offs. That was before the SocGen fiasco and more importantly, it was before “Super Stallion Ben” supposedly reacted to economic news (not global stock market declines according to his defenders). I am not sure what economic data he was responding to with that intermeeting cut. Was it the initial jobless claims report that came out two days later? I doubt it, since they declined. Was it an early look at today’s release of durable goods orders? I doubt it, since they increased.

Whatever his reason - Chairman Bernanke did it. And to be honest, I didn’t think he would. I know I should expect that he will drop rates the moment he has an opportunity to screw short sellers or respond to the cries of the “bailout bulls.” I just thought he would have some courage to wait one week until the scheduled meeting. My thought was that we would get a washout last week and then a recovery in advance of tomorrow’s meeting. The surprise cut changed all that and scared people into stopping the selling pressure.

However, despite a lot of improvement in sentiment and a healthy dose of short covering support, I was not overly impressed by the market action. I am still waiting to see natural buying come in. As a result, I only gave 176 new UP signals and I am maintaining my bearish bias. I spent most of my analytical efforts trying to discriminate between stocks I thought would have gone up regardless of the cut and those that went up primarily due to the interest rate shenanigans. Doing that relied more upon their market action and volume in the previous three weeks than it did from Tuesday to Friday.

The V-bottoms that showed up in many stocks are interesting, but I try hard not to react to them unless there is company-specific fundamental data to justify it. That is very rare. Instead, I decided to wait on about 400 stocks that rebounded off thin air. Many of them are up 5-10% since then - in fact, over 1000 of the DOWN signals I had going into last week advanced more than 5%.  Rallies during bear markets are sharp and short-lived.   I am waiting. This one has certainly been sharp and as for short-lived….that is yet to be determined. If this week’s Fed intervention results in a continuation of positive momentum and real buying, I’ll probably be pushed back into a short term bullish stance again. Until then, I am waiting.