Here's some late day thoughts:

1) Those who are still doubtful that the Fed will--or should--cut rates at the Sept. 18th meeting should take a look at Martin Feldstein's speech at Jackson Hole over the weekend. Merrill Lynch noting that Feldstein, who is head of the National Bureau of Economic Research (the agency that determines when recessions start and end), gave a speech at Jackson Hole over the weekend where he said, (according to Merrill), "there is a significant risk of a very serious downturn" and added that "the multiplier effect of home price declines and declines in consumer spending could push the economy into recession". He went on to say "I would be more comfortable if the Fed funds rate was 4-1/4% rather than 5-1/4."

2) As expected, Standard & Poor's will decrease Home Depot's

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[HD  Loading...      ()   ] shares outstanding after the close of trading tonight to account for the 289.600 million shares (almost 15%) accepted in HD's Dutch auction self-tender offer.  As a result, indexers pegged to the S&P 500 will be selling HD and buying the rest of the index at the close, which may account for part of this modest late-day rise in the S&P 500.

3)  You think you're confused?  Lowry's is the oldest technical analysis service in the country--their data goes back to the 1930s.  Seasoned data, seasoned professionals, widely read on the Street.  But when we have volatility that occurs well outside of historical bounds, some of the old technical tools may not work as well.

Noting that we have seen eight 90% days (either up or down) in the past 29 trading days, or roughly one every 3.6 trading days since late July, Paul Desmond and Richard Dickson of Lowry's called the recent market events  "the greatest rash of extreme volatility in at least sixty years."

After reviewing the data and the history of 90% upside and downside days, they conclude with the following remark:
"With the evidence currently available from our measures of Supply and Demand, the probabilities favor a limited recovery rally. The 74 year history of the Lowry Analysis shows that such rallies are usually best used to sell into strength and build defensive positions. However, it is important to recognize that exceptions to the probabilities are always possible."

So, we are likely to have a recovery, which may be a head fake, but that may be wrong too.  These are tough times for traders, and it is difficult interpreting the data, even for the most seasoned professionals.

Questions?  Comments?