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October 15, 2005

False rally on Friday October 14, Sat., Oct. 15, 2005, 8:55 AM

Without any further editorial comment until I can write today's Week in Review, I simply want to go on the record that the broad market equity rally on Friday was a piece of deception orchestrated by Wall Street who were buying more time to distribute stocks ahead of the next severe market decline that will soon follow.

I took my cue from CNBC's Bob Pisani who (just prior to my article at 12:19pm with at Dow 10267) told the audience the market was trying to melt-up. That was a sales pitch, which followed about five minutes earlier a point where the market was about to crash. Pisani's strange commentary fell on deaf ears as the Dow proceeded to fall back to below 10230 almost an hour later.

There followed two more buying surges, one at 1:30pm and the other at 2:30pm, from a base of 10240 to 10287 at the 4pm close. I was not impressed. The intra-day traders are now over-bought.

There could be an interesting battle Monday as the Bull side bring their final ammunition into the battle to try to put down the Bear. But by Friday, after a weak PPI report on Tuesday, some warning signs from the housing starts and Beige Book on Wednesday, and the Money Supply on Thursday (after the close), plus numerous questionable earnings/guidance reports this week, I think the Bear will be in control by next Friday's close.

With this mindset, I will now start to prepare the WIR for Week #41.

Posted by Posted by Bill Cara on October 15, 2005 08:27:59 AM | Category: Cara Today in the Market

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