October is a very dangerous month for Wall Street to begin with. But with Washington having trouble cutting the federal budget deficit by even a minimal amount and with the economy continuing to fade, this October could be a lollapalooza.

Wall Streeters were amazed that the stock market didn't disintegrate on Friday after Congress rejected the much-criticized budget accord hammered out painfully over the past few months by its own leadership and President Bush. As far as Wall Street was concerned, the budget agreement was a poor attempt at cutting the deficit, but it was at least an attempt.

Even though the stock market was broadly lower when trading began Friday morning, professional traders managed to keep the high-visibility blue-chip issues from collapsing by buying stock index futures contracts heavily. That buying began after the Dow Jones industrial average had fallen 57 points within minutes of the opening bell.

Yet while this type of trading strategy may work at propping up the market in the short term (and earn the traders some profits), it isn't powerful enough to overcome the decidedly negative economic news that the stock market is likely to receive in the weeks ahead.

There is, however, one hope for a temporary stock market rally. Wall Street could get a breather if tensions in the Middle East ease.

When Saddam Hussein lobbed a conciliatory word toward George Bush early last week, for instance, the financial markets leapt to their feet and applauded. And when Bush returned the serve with an equally soft touch, Wall Street was as excited as it has been in months.

Stock prices last Monday staged their finest rally in a long time, and it wasn't -- as some newspapers suggested -- because congressional leaders had reached the soon-to-be-defeated federal budget accord. The market's rally at about noon coincided almost to the minute with a speech Bush gave at the United Nations in which the possibility of a negotiated settlement to the Middle East problem was hinted.

This soft-speak brought about lower oil prices and helped turn what had been a 600-point decline in the Dow since July 13 into only a 500-point drop.

The market's enthusiastic reaction to an outward easing of tensions in the Middle East was predictable -- so predictable, in fact, that stock traders anticipated that it would happen back in early August, just after Saddam invaded Kuwait and sent oil prices skyrocketing.

After last Monday's rally, the big question is: Can the soft-speak coming out of the Middle East continue to divert Wall Street's attention from vital issues such as the nation's slowing economy, the continuing problem with the federal budget deficit, the precarious position of many U.S. banks, rising unemployment, climbing inflation, high interest rates and, last but not least, the fact that despite last week's calls for Middle East negotiations the United States and Iraq still appear more than willing to go to war?

And let's not forget one last concern -- October hasn't been a very good month for stocks in recent years.

Many experts believe that before long Wall Street will begin refocusing its attention on the budget deficit and what it is doing to the nation's economy. And stock prices will head lower -- maybe by a substantial amount.

As far as the Middle East situation goes, Thomas McNaugher of the Brookings Institution in Washington said Wall Street and the oil markets overreacted to the "dialogue" between Bush and Saddam.

"The financial markets tend to grasp at straws. And the oil market is the same," said McNaugher, an expert on the Middle East military situation.

The Middle East situation probably won't come to a head, McNaugher contends, until late November, when U.S. military muscle in the region will reach its peak.

Unfortunately for Wall Street, a lot of the nation's other problems will not stay quiet until November.

Within the next couple of weeks experts expect more evidence from the government and from the private sector that the nation's economy is slowing.

The biggest problem for the stock market this month, however, may have more to do with feelings than facts. Even professional Wall Streeters are concerned about the October jinx, which caused a meltdown of stock prices in 1987 and a mini-crash in 1989.

"It's always in the back of everyone's mind," said Tony Woodruff, head trader at Kidder Peabody & Co.

"Kiddingly, we've said around here that maybe we should take the month of October off and avoid trouble."

Woodruff believes that past Octobers should be no indication of how stocks will react this month because "the landscape is different."

On the positive side, stock prices have already come down significantly from peak levels. In 1987 and 1989, stocks were high-priced before the October sell-offs.

But there are dangerous obstacles in the landscape now that weren't around in previous years. For one thing, the economy was in much better shape in 1987 and 1989 than it is now.

Woodruff, however, said that an even bigger difference now is that the financial markets are concerned with the stability of U.S. banks.

"The market has been concerned with the financial structure of the U.S.," he said. "The whole downdraft in the market is based on that."

So if you are an investor who is thinking of jumping into the stock or bond market on hopes that the Middle East situation is calming, just remember this: There are a lot of other concerns waiting to take its place in Wall Street's paranoid mind.

And on top of all that, the Middle East situation itself might not be as calm as the markets believed this past week.

John Crudele is a columnist for the New York Post.