At about 1:45 p.m. EST today the Fed decision will be given to reporters, embargoed for release until 2:15 p.m. But some of those reporters will call a few traders on Wall Street, and we should see stock prices start to move in one direction or another. Then, at 2:15 p.m., the rest of us will find out what happened.

The Fed funds rate is about 120 basis points over the two-year Treasury note rate. If the Fed cuts the funds rate by 50 basis points, as they should if they learned their lesson from their last quarter-point cut, the next leg up of the bull market will continue. You should first see the S&P breakout over 1368, come back down to test that support level from above, and then take off. The test, whether it comes later in the day Wednesday or on Thursday or Friday, will be the last (and safest) opportunity to get fully invested.

But if the Fed only cuts rates 25 basis points (one quarter point), the S&P will probably fall sharply to our old friend, the 1326 level. That level has to hold for me to believe that the recent low marked a directional change in stocks. If it doesn’t, we will see a full-on test of 1260. In either of those cases, the negative press around the Fed could easily cause another 50-basis-point “emergency” cut, and I think the bull market scenario will resume then. It would take a real, sustained break of the recent lows to make me think this bull market is over.

I’ll follow-up in tomorrow’s Radar Report, or with another Flash Alert if necessary.