The calendar is nearing the moment of truth. Will there be a 25- or 50-basis-point (bps) cut in the federal funds rate? This is probably the most-discussed market event in recent history, with commentary from economists, market participants, and journalists filling the airwaves. In this space, we are chartists at heart, but we do have a decent background in economics -- so we could be referred to as being a few steps above a closet economist. Digging deeper, we don't think the answer to the above question matters very much. The economic numbers may lead toward 25 bps, while the market (almost always ahead of the Fed) seems to be leaning toward 50 bps. The CME FedWatch Tool shows a 61% probability of 50 bps and 39% chance of 25 bps. Technically, we are inclined toward 50 bps as the market is (and has been) suggesting that the Fed is far behind the curve. The reaction of the stock and bond market to the cut could be quite interesting -- and we're not talking about the initial 15-minute response. Going back to 1960, a Fed rate-cutting cycle generally has been positive for the stock market. But there are a few exceptions: the beginning of 2001 (the tech bubble) and late 2007 (the financial crisis). We can blame easy money policy and government regulations on the housing bubble, but not the tech bubble. For more than six decades, the Fed has started cutting cycles and then often moved very fast because of weakening economic conditions. (Mark Arbeter, CMT)

With each passing day, major indices get closer and closer to their all-time highs (ATHs) from July 10 and July 16 (S&P 500 and S&P 400, respectively). The only major index that has bounced enough to reclaim ATH territory is the NYSE Composite, probably due to the minor 5.6% pullback the index saw in the second half of July and early August. The S&P 500 (SPX) is within 1% of its July 16 all-time closing high of 5,667.20 and remains on its "V" shaped formation and trajectory. The Chande Trend Meter is back up to 83%, indicating a strong and strengthening trend; the Vortex Indicator is close to bullish territory; the 14-day Relative Strength index is back above the midline 50% level; the daily MACD is back in positive territory; and the 21-day rate-of-change has cycled back into bullish territory after dropping into negative territory at the start of August. Some 75% of SPX stocks are above their key 200-day average, while 73% (up from 44% on August 5) are above their 50-day. More impressive, the more-concentrated S&P 100 (OEX) is showing 83% of its stocks above their 200-day average, up from a recent 65%. Both the SPX and OEX advance-decline (AD) lines have surged to ATHs prior to price; historically, that has been very bullish for at least the intermediate-term period. The Nasdaq 100 (QQQ) is 4.5% from its ATH near 503 and its AD line has posted an ATH prior to price. Some 71% of QQQ issues are above their 200-day, up from 44% just 10 days ago, while the percentage above the 50-day has jumped to 61% from 29% on August 7. (Mark Arbeter, CMT)

Vertex Pharmaceuticals develops therapies to address cystic fibrosis and other diseases. The company was founded in 1989 in Cambridge, Massachusetts and has 5,400 employees. It has research programs and facilities in the U.S., the U.K., and Canada. The shares are a component of the S&P 500.

U.S. stocks are up, at midday. The mood feels optimistic with some caution sprinkled in as Wall Street hasn't forgotten the drubbing two days ago. Today's start was helped again by Japan's Nikkei, which rose 1% overnight after the dramatic fall a few nights ago. A Bank of Japan official commented that the central bank wouldn't raise rates further given the market volatility. Earnings reports continue to drive movement in individual U.S. stocks.