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October 28, 2005

Leo missed the RSI reading, Fri., Oct. 28, 2005, 1:26 PM

Two hours ago, reader LeoV missed the RSI reading when he suggested that the broad market was looking tired.

It's now looking a little tired, but still strong enough to come back and end the day with a triple-digit gain for the Dow.

Today is just a good day to way the direction where traders want this market to go. Wall Street obviously wants it to go north, but the owners of capital (the buy-side") represent the biggest group in the market.

I'm interested in what they" have to say.

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Posted by Posted by Bill Cara on October 28, 2005 01:26:51 PM | Category: Cara Today in the Market

Discourse

Bill,
Like any good forecaster (which I know you don't want to be known as), you have now apparently pronounced both lower prices and higher prices, so you can't be wrong!
Best Regards
Dave P

Posted by: davep [TypeKey Profile Page] at October 28, 2005 1:40 PM [link]

Hi David,

Actually, I think the broad market is headed lower, from the indicators I give, but I need to see evidence that the Bulls don't take the market higher to start a rally here.

Rather than say the market is going both ways -- which we all know it does -- I'm more interested in pointing out that (i) there are times not to jump to conclusions, and (ii) that a single indicator (like Candlesticks or Elliot Wave or RSI/MACD) ought to be viewed with suspicion at times that markets are volatile. I don't like to be whip-sawed, which is really the message.

Cordially,

/Bill

p.s.,

I still think the Dow is going to 9800 or lower. Whether it hits that mark on Valentine's Day (Feb 14), or not, I guess we'll all just have to wait.

Posted by: Bill Cara [TypeKey Profile Page] at October 28, 2005 1:56 PM [link]

Dave P,

Regarding the earlier chart showing a reader's observation that the market was looking tired, Bill's comment was that "he wasn't so sure" of the weakness, but that we would all know by the end of the day. He is also stating that he wants to see what happens today and Monday - after weekend strategies are starting to get priced in the market. So, he has not called for both lower and higher prices. He has clearly stated that the recent market action may or may not change his current opinion regarding a move lower and that observation is needed.

g034

Posted by: g034 [TypeKey Profile Page] at October 28, 2005 1:59 PM [link]