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From: Rarebird	10/5/2010 9:09:22 AM
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Transcendental Market Truths: The Market: Stocks fell Monday on lack of buying power. Yesterday's decline comes as the trend has just turned down, so reactions against the new and developing downtrend are likely to provide opportunities to sell the market. There was nothing in Monday's action which suggested that the market is strong and that this was a feint to the downside. A pullback to the price vicinity of the 50-day moving average around SPX 1100-1105 is likely to take place over the next two weeks. I then expect a rally to end the cyclical bull market. That rally should be the weakest rally technically since the early July bottom and will most likely lead to a huge decline starting the second week of November and lasting into mid-December. S&P Midcap 400: I've noticed some very unusual trading in the MidCap ETF MVV which indicates that someone was anxious to sell quite a few shares. This behavior is reflected to some extent in the MidCap Index itself as money flow continues to fall.... Economic data is likely to start reflecting the accelerating freefall in consumer demand. Earlier, news reports showed a pickup in consumer spending, but in retrospect it appears to have been due to the pent-up demand caused by the Federal Government's belated extended unemployment payments, which had been suspended for several weeks, then were resumed with a lump sum payment covering the missing weeks' checks. This spike in consumer demand convinced Wall Street that the double-dip scenario was off the table. Unfortunately, the spike is over and consumer demand is sliding hard now. consumerindexes.com It's difficult to have the confidence so many Polyannas and Mary Poppins type analysts exhibit when I realize that, after spending trillions on bailouts and stimulus, it just wasn't enough to offset the drag of this depression and to get the economic engines running on their own again.

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