You have to love honesty, and that's what we heard today when Mr. Bernanke told congress that things in the United States are not very good at all. That although the expectations are for 3.5% GDP (gross domestic product), the risk is towards weakness from that perspective. The moment this news came out, along with other tidbits not too friendly for Wall and Main Street, the market tanked out. No holding back either.

The Dow fell down straight nearly 200 points from the moment Bernanke started telling us things were awful. The market acted surprised by this news, which is interesting since he told us about a week ago that it would take 5 to 6 years before things started to really improve in our economy. The markets finished off the lows, but it didn't make the move we had all hoped for after yesterday's excellent reversal off the lows. Mr. Bernanke spoke the truth, and for that I applaud him, even at the cost of watching stocks head lower.

We started the day with a small move higher, which came directly from the earnings report Apple Inc. (AAPL) gave last night. The Nasdaq was leading, which is good to see, although it was mostly from one stock. The S&P 500 and Nasdaq came within a hair of reaching their 50-day exponential moving average and trend lines when the market reversed lower. However, the move lower was trading above the 20-day exponential moving averages and also trading near the top of yesterday's beautiful candles. This gave me the hope that we'd head higher, and higher we did go. We started moving back up slowly, but surely, until 2 PM Eastern Time when Mr. Bernanke started speaking. That was it for the bulls. Off the lows, yes, but back below 1080, and below the 50-critical resistance tested that resulted in failure. Not good action, even with mostly very good earnings from last night and today all over the market place from commodity stocks to financials.

A bad day for the bulls for sure. The bears can thank Mr. Bernanke, and for having someone come out and tell the truth about things rather than covering up things. The bears often complain about conspiracy theory in the Government, but today it was the truth you didn't expect to hear that gave them their victory over the bulls for the day. Bears in a knockout for the day.

With the failure at the trend line and the 50-day exponential moving average, we have to continue the theme of a down-trending market even though there were, and still are, signs that this was coming to an end short-term. Those daily MACD's looked so nice, and still do, actually, but you have to wonder where we go from here. Even though things looked better, all that matters is that we failed where the bears had to cause that failure. Failure is failure for whatever the reason.

Sure, the fed gave the market the necessary juice to fall hard late in the day, but markets run out of excuses after a while. The market bulls have tried hard these past many weeks, but the reality remains that they can't get the job done, and in the end that's all that matters. We started to show the signs of the first higher low being put in place, but for now, that remains unclear. Will we shoot lower now after yet another resistance failure? Will we just blow out the prior lows and keep the theme going? We're about to find out for sure. Bottom line is the bulls can't get the job done. Now we'll see if the bears can create new lows.

To my surprise, although I don't think it'll continue, the earnings haven't been half bad. Lots of decent news even on the revenue side these past few days from stocks, I would have said, is in deep trouble such as eBay Inc. (EBAY) and QUALCOMM Incorporated (QCOM) tonight. What's bad is that the earnings aren't bad, and yet we can't take out key resistance. What is left for the bulls in their arsenal to move things higher? Doesn't seem to be much left. I guess they have to hope for some surprising economic news to come out in the near future. That hasn't been there for the bulls over the past few months. Interesting times and not great ones for the bulls.
The beat goes on. We'll see what tomorrow brings.

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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