Fed fund futures now price in an 86 percent chance of a 25 basis point cut on October 31 and are also starting to price in a 14 percent chance of a 50 basis point cut as it becomes clear just how dire the housing situation has become, especially in regards to its detrimental effects on the US economy.

US economic data will likely prove to be mixed on Thursday, as Durable Goods Orders are anticipated to improve while New Home Sales are expected to fall.

The Nasdaq Composite ($COMPX) hit a new 52-week high. Other indices have risen to a lesser degree and are in line with the typical price reaction following a move such as on Friday. It would now be normal to see some retracement again on Wednesday.

Tim Bourquin interviews Timothy Sykes, who talk about why he focuses on shorting micro cap stocks, and why he closed his hedge fund in order to write and trade.

Think you know about risk and reward?  Most traders use the target price and the stop price as their model of risk and reward, and leave it at that. However, they may be missing an important risk/reward concept.

You’ve got to hand it to the Goldman crowd. They securitized dicey mortgages, sold them to their customers, and then, in order to protect themselves from the inevitable losses, sold them short!  Any Humpty Dumpty investor dumb enough to sit on this wall deserves to be pushed. Goldman gave them all a shove – and made money doing it.

The release of existing home sales figures in line with or worse than expectations could rattle the equity, forex, and fixed income markets as the figures may spark additional speculation that credit markets and the economy still face many road blocks before they can fully recover.

Toni Hansen believes that the market will congest before it decides to either gain momentum or fall through the support and back into the congestion from mid-August.

Mike Paulenoff's work argues that the upmove actually is a countertrend rally prior to another downleg that should press prices into new low territory.

Derek Frey provides weekly market commentary on futures and options for the week of October 22.