Yesterday the DOW rallied almost 300 points to take back Friday's losses. The Fed meets today at 2:15 PM and it seems a lot of people are betting on some sort of relief from the Fed. If not lower rates then a statement telling the market they are on guard.

Friday's outburst by James Cramer against the Fed probably helped propel people into buying yesterday. It reminded them that the Fed has always been there to bail out the stock market. They remember 1998 when the Fed lowered interest rates to help the Long-Term Capital Hedge Fund and in the 2000 bear market when the Fed lowered rates over and over again to try to stop the downward momentum. As a result they created the housing bubble.

Everyone knows that the Fed will lower rates, even if it means putting the dollar at risk, to help Wall Street and the big banks. And the angry Cramer reminded people of that.

So a lot of people made bets yesterday that the Fed will save the market today. But will they? Does the Fed really think things are that bad right now? It seems to me the Fed is caught in a bind. If they lower rates they'll create inflation and kill the dollar. If they don't lower rates at some point the mortgage market will come unglued. We aren't at that point yet. Seems to me that the Fed is likely to do nothing - and hope the mortgage problems aren't as bad as people fear. If they appear to be they'll then cut. Otherwise they'll keep their fingers crossed and hope for the best.

There is a good chance that the short-term betters will be disappointed with the Fed's response this afternoon. People think the Fed is going to say something reassuring about the stock market, but to do that would make the Fed look like a joke in the eyes of the rest of the world. It would make it looked overly scared and ready to bail out the market at the touch of a button. A jittery Fed would not bolster the confidence of international investors - and ultimately the US must keep the confidence of the bond market high as this country is now owned by overseas holders of US debt.

If the market does drop after the Fed meets and gold stocks hold up I'll be looking to buy back into the gold market.

At some point later this year I expect the Fed to cut and for gold to explode, so that means the next week or two should make for a good entry point for gold stocks, but I want the stocks to show good relative strength against the metal and the broad market again before buying.

In this week's podcast recorded on Sunday I discuss the current market correction, Jim Cramer's Friday market rant, and the sectors and stocks that will perform the best after the correction is over.

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Here is a link to a video discussion about the stock market correction and how I plan to buy back in. Instead of trying to buy on the exact bottom I am looking for a bounce and then a succesful retest of the new low. I will then run scans to look for the sectors that are holding up the best in the market and are poised on long-term charts to go higher. I expect gold stocks to be one of these sectors. Charts in video courtesy of TC2007.

This video presentation was given to WSW Power Investors a week ago, but still gives you a good idea of what to look for now. To get future videos you need to take a risk-free trial to WSW Power Investor. To activate your trial just click here.