This bull market is really something to behold. It is doing mind boggling things we just don't see very often. Not even in some of your best bull markets. It is staying overbought on the daily charts longer than I can believe. Add in the fact that there are now some small negative divergences on those daily charts and you have to wonder why it won't correct. The bull market is alive and well but we really need and should be getting some form of a pullback based on the look and nature of those daily charts across all the major indexes.

Today was interesting in that we saw this behavior once again. We took off out of the gates to the up side which created even deeper overbought conditions and even deeper negative divergences. You just had the feeling it would all collapse as the day went along and that reality did not disappoint when with just a few hours left in the day the market fell hard. The Nasdaq falling nearly forty points off its highs. It looked as if the whole market would go red and fall apart when it did what it always does these days. It turned around and shot back up. No deep selling although the Nasdaq did print a nasty black candle off a gap up after a long move higher in the pattern and these candlesticks usually but not always signal a near-term top. In this bull you can't count on it being dependable but it should theoretically be the top short-term only. A black candle means on balance sellers once the gap up takes place at the open. An up day but below the opening gap up. The bulls continue their happy dance but at least the bears have some hope short-term.

One interesting note to take from today's action was how badly the Nasdaq lagged the other indexes. This too is a red flag of sorts because when beta begins to lag that can often mean a run to more safe stocks with less volatility and risk. When risk goes away markets usually struggle. In this bull who knows because there's never any follow through but it is worth noting and should put the bulls on notice. it wasn't just that the Nasdaq lagged, it was how deeply it lagged. Big volume selling on technology stocks as the day wore on. The rest of the market closed well overall. Lots of nasty black candles on leading technology stocks such as Apple (Apple (AAPL), Google (GOOG) and others. We'll see Monday morning how this plays out but it does at least tell us to be very cautious near-term.

Commodity stocks are strong. We have been very fortunate to partake in some of these the past many days with big wins on those plays for sure. It's almost as if the market is telling us inflation is down the road, meaning a good economic recovery is at hand. No way to tell for sure if this is the message, but these stocks are being treated as if pricing power is upon them, as is demand. They clearly go hand in hand. Demand brings about inflation. These stocks are breaking out, and I don't think we'd be seeing this if the market wasn't telling us that an economic recovery we keep hearing about will actually take place. Most seem to doubt it, but the market seems to be saying otherwise for now.

The good news for the bulls is that the S&P 500 has now made a decent move away from 1151, the big breakout level. It's now nearly 35 above and that's good as it now allows for a decent pullback to occur without worrying too much about the S&P 500 giving that level up before buyers come back in. The 20-day exponential moving average is actually a few points above that 1151 level which adds an extra layer of strong support to this index. When important moving averages break above critical horizontal price support, this makes the job for the bears very difficult. 1151 alone would be tough support but add in the 20's and the battle just magnified quite a bit against the bears.

Friday the market is closed but we have the critical jobs report at 8:30 am eastern time. It will be reported on CNBC or Bloomberg. There is the expectation is for solid job growth. The ADP report on Wednesday put that growth in serious doubt. if the report is poor it is likely the market will have its catalyst to finally sell and unwind deeper than we have thus far. If the report is good it may sell some anyway but you never know with this bull market machine. A good report would put the selling in to question but you all know the truth by now which is if a market needs to sell it's going to no matter what comes out favorable. It will be very interesting for sure.

Happy Easter Sunday for those who celebrate.

Peace

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

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