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Wall Street got almost all it was looking for from the Fed yesterday. A 75 bps reductions in rates was not quite the hoped for whisper number of 100 bps but good enough to send the markets into orbit in a repeat performance of last Tuesday.

Whether this exuberance will last is an entirely different question. Fundamentally, nothing has changed other than that the Fed has used up some more ammunition in an attempt to prop up the financial markets. Since my mode of operation is to look for and identify major trends, let’s peek at where our Trend Tracking Indexes (TTIs) stand after this monster rebound:

Domestic TTI: -0.17%
International TTI: -8.55%

While these indicators have obviously moved up from their bearish position, they are still stuck in neutral territory for the domestic area and remain bearish on the international side.

To me, a large one day rally, either up or down, is always suspect because it doesn’t really identify a current trend but merely reflects an enthusiastic reaction to a news event. Nevertheless, the S&P; 500 managed to wipe out its losses for the month of March with yesterday’s gain. We will remain mostly on the sidelines until a new major trend emerges.

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