The path of least resistance… down… simple as that ahead of the Bernanke speech and with more brokerages downgrading one another. Tech was supportive on the notion that technology companies are less debt encumbered and thus a safe bet in this market. That’s all well and good unless the economy goes down the crapper and tech orders go with them - but for now tech is seen as the safe haven. I guess pigs do fly. Still, for a 6 point down day in the S&P, VIX jumped over 5% as fear remains.

Last Sunday this blog broached the possibility of some sort of intra-meeting move by the Fed. And then on Monday, Paul Kasriel at Northern Trust told me a cut in the discount rate would make life easier for the Fed as opposed to pumping the system via daily injections. Well, the discount cut happened, as we all know.

Say what you will about how the Fed could care less about ‘moral hazard’ and has said “Uncle” after just a month of market melodrama by deciding to follow the typical bailout script of Big Al Greenspan — the more active participation by the Fed to try to plug the leaks in the proverbial dam is something that the bears should be very respectful of in the near term.