And that's what both the bulls and bears are facing. Each side has set up a wall that seems too impenetrable. The bulls have set up camp at S&P 500 1080 where there is strong gap support. We've gone down for a few visits, yet each time, just when it looks real bad, the bulls seem to be able to hold their wall up. It has been no different on the other side of the ledger. Each time the bulls get up to the 20- and 50-day exponential moving averages at 1098 on the S&P 500, the bears set up their own wall and the bulls fail.

Neither side is in control whatsoever. Just random whipsaw within a triangle that some day will either break out or break down, but when that will happen and which direction it will take is very unclear. Why? Because these triangles make for lots of head fakes, but seemingly they are waiting on the next huge employment report on the first Friday in September. If it's bad, you get the feeling the market is going to really fall hard. If it surprises to the up side, then you get the feeling this will catch the masses off guard and force the shorts to cover, moving the market higher. The walls of support and resistance are set up and clearly defined. It seems the economic news is going to be the straw that breaks the back of the losing side. For now, the walls are holding. Won't be this way forever, but for now we must respect the way things are set up and move through things quite slowly.

Let's take a deeper look at the really important levels that define the bigger picture outlook. 1080 is important gap support, but 1050 is the big wall of support the bulls need to hold. We see the 70-week exponential moving average and more importantly, we see the up trend line off the March 2009 lows at that level. A strong confluence of massive support that, if lost, would lead to much lower prices. On the up side we have that recent high at 1131 S&P 500 that has been tested, but has not been broken skyward. If we can clear 1131 we have some room to run higher. So while 1080 and 1098/1107 are the short-term numbers to watch, 1050 and 1131 are the longer-term defining numbers we need to watch closely every single day.

We gapped down yet again today, but as soon as we got to the gap up level from yesterday, 1095 on the S&P 500, the market found a bid and began its journey off the lows. The Nasdaq was leading as it needs to, and before you knew it, we were green across the board. Excellent action. As the day wore on we headed right back up to the 20- and 50-day exponential moving averages at S&P 500 1098, and this is where the bears stepped in and said not today. Not a huge pull back in to the close, but enough to allow the market to fail once again at this wall of resistance from 1098 to 1107. Not terrible action, but the market is telling us that the only real way to clear this area of resistance is to get good news pre-market that will allow for a gap up in the pattern allowing the bulls to clear away this mess and move things higher. That won't be easy. Tomorrow we have the jobless claims report. The bulls can only hope things have improved since last week where we saw some poorer numbers than anticipated. A very difficult market for all involved.

The market is not happy after hours. No real news hit but the futures are down quite a bit from the closing prices. Some poor earnings reports and not the best news from SanDisk Corp. (SNDK), but the futures are down more than one would expect based on the news. And so it goes. Nothing easy. Maybe they'll correct themselves by the morning, however, it does make you wonder when you see these types of things happening. So darn manipulated and another reason why you can't get overly aggressive anything in this market for now. The S&P 500 is down about 6 points and the Nasdaq is down about 14 after hours. With those claims coming in an hour before the market opens, you are going to see some wild stuff before we open up tomorrow. Now the bulls are even more desperate for a better than expected number based on the futures for now.

This is a tough market and it's not going to get any easier. I want all of you to be prepared for possibly a longer-term tough situation. The news will need to get much better economically for this market to bust up and out. Hard to imagine that happening, but you never know, and of course, we can all hope things do improve for everyone out there. However, we do not play on hope. Truth is the game and the truth is things will probably be tough for some time to come.

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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