Will The Fed Come To The Rescue?

Good morning. Premarket futures are down but have been steadily improving throughout the morning following yesterday's losses.

Weakness in overseas markets and more subprime concerns are in focus once again and there's little of anything new for investors to contemplate. Premarket trading is fairly subdued with only a select number of gainers (ASTI, DSTI, GYMB, SMTX, LEND, FMT, GTW, AKZOY, ASML) and losers (DTPI, BARE, VRGY, IVAN, SVNT, HRB, AAUK, HWCC, GOLD, EFUT).

Beyond the obvious retest of prior lows, talk of 200-day moving averages are now starting to come into play (which is around 1350 on the S&P 500). To be sure, we're likely to hear lots of table pounding from the serial bottom callers in an effort to defend the recent lows. For today, they may very well be successful in that effort, but I'd be extremely careful chasing anything on either side of the fence (short or long) at this juncture.

The next tell I think will be how the market responds to the upcoming inflation data (PPI tomorrow and the CPI on Friday) as the bulls continue to cling to the hope that Bernanke will save the market and economy from its subprime nightmare by lowering rates. As usual, the get out of jail card continues to be a friendly Fed and easy money.

Trade smart out there today and, remember, if you don't see a good trade, don't make it. There's no reason to push your luck in this tape unless you enjoy losing money.