A sucker's rally, otherwise known as a DCB (dead cat bounce) is a pattern that usually begins with a very large oversold condition (see Friday's action) and then you get "bottom feeders" quickly come into the market to buy what they believe are values that have been thrown away like the remains of dead fish on which the bottom feeders exist. This lasts for a few days and when those that trade have their fill, the buying ends because those that can provide a sustainable rally (the public) have been recently burned, and they aren't going to put their money in after just taking a licking.
When this sucker's rally will run out of steam is anyone's guess, but I predict that it may get back to around 1050 on the SP 500 index before finding out the emperor has no clothes. Then its back down to get near the previous LOY (837) before finding some support, but this time everyone is throwing in the towel since the sucker's rally did not continue.
This will be the true bottom when the professionals don't even want to catch the falling knife this time. It is all in the market psychology that has played out many times before this dump in the market.
The only thing that can change it is if the government continues to intervene which shocks the rules (no short selling, government taking equity positions in financial stocks, bail-out funds being delayed, the election of BHO who will really change the rules if he gets a very Democrats Congress) and doesn't let players get time to get used to the new ones before the Government tries something else entirely.
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