And what it is isn't pretty at all. He said he's disappointed at how things are moving along and expects recent weakness to persist for a while longer than he'd like it to. When the fed makes a statement like that there's only one thing left for him to do. Be more inappropriate, of course. Keep the printing presses rolling day and night. Print those dollar bills as if they are the holy grail. He has hinted that there's a reasonable chance we will actually be seeing a QE3 program even though QE1 and QE2 did absolutely nothing for the economy other than to put it further into debt. He also talked about too big to fail meaning there will be no free markets. He will control what he needs to when he feels he wants to.

If a big bank or institution is about to go belly up, he will make sure it stays healthy. He will flood with cash, even though that institution doesn't deserve it. He wouldn't do that for the average business out there, would he? Of course not. It's all about him and what he thinks it takes to keep his pals solvent in the financial world. Good old Bernanke. Friend of the very wealthy, and kick them when they're down to everyone else. You wonder just when the average person is going to say he or she has had enough. Scary actions by our fed leader, but who is to be surprised after he did QE2 when QE1 was a colossal failure.

He went on television today and told the world he's in control of things even though they look bad, and thus, not to worry. Truth is, he's in control of nothing and grasping at straws because there are no more tricks for him to do. He's run out of bullets so he's recycling the old tricks that didn't work and prating real hard. Sad but that's what we learned today. Bigger picture, it's not pretty. Short-term, the market may just love it all over again.

When the fed says he's going to print money what he's really saying is he will continue to flood the banks with cash so they remain solvent even though many don't deserve it. This naturally put a bid in the financial stocks today. This helped the market rally some. When the financials rally it usually means the overall market gave it a shot to move higher. The S&P 500 needed it badly as it closed just two points above its 50-day exponential moving average yesterday. Precariously close to losing massive critical support that could have opened the door to much deeper selling. You wonder about the timing of it all but anyway, the bottom line was it gave the financials and the overall market a boost up that began with the futures overnight.

Although we closed well off the highs, we did gap up and hold the gap up throughout the day meaning the bears and the bulls both have gaps all over the place to try and support their side of the argument. Gaps are powerful tools of either support and resistance, and now both bulls and bears alike will have a harder time making a more sustainable move based on how many open gaps exist not too far from current prices. A good day for the bulls, but nothing to get too happy about. It wasn't a knockout by any means. Just a nice save for the time being.

The market is going to continue to be a whipsaw machine for the foreseeable future. There are opposing forces on both sides. Very powerful opposing forces as well. Think about it. We have the guarantee pretty much of a continuation of dollars being printed, which is undeniably bullish. However, on the other side, we have the headaches of earnings not being as strong in most cases as most hoped along with an eroding economic picture. So on some days we'll get more good news from the fed and on some days, not all days, we will get poor earnings reports overnight and that will bring the futures down. We'll get our share of good reports. Just that we'll get more bad ones than we had anticipated. We'll have to potentially deal with a continuation of a poor manufacturing background.

The Empire state index and the Philly fed indexes aren't likely to reverse really bad numbers last month. Throw in Chicago's report as well. The biggest of the big saying things looked pretty dire just one month ago. Not likely to turn around all that quickly. The Jobs Report doesn't hold much hope either, I wouldn't think, when a company such as Cisco Systems, Inc. (CSCO) says they're going to be laying off 10,000 people by the end of August. So yes, we have a market friendly fed. And yes, we have a market unfriendly economic backdrop. It won't be easy from here folks. That I can promise you.

While it would be easier to just let the free markets take over, we won't see that so now we have to focus on where the key resistance and support levels are. The 50-day exponential moving averages and throw in the 20-day exponential moving averages are what we need to focus on in terms of support. On the top side, we need to clear through old gap downs in place. We really need to focus more on support, and thus, 1312 and 2755 on the S&P 500 and Nasdaq need to hold. It's tenuous at best. But in this market, we could lose it on the S&P 500 while holding it on the Nasdaq. We could lose it on both only to see it come right back with the right piece of news.

However, in the end, you have to hold those key moving averages as an emotional thing for the bulls to hold onto. If we lose those levels with force you will see a period of selling. The fight is on. Don't get overly aggressive folks. It won't work out in your favor if you do, whether you're short or long. Keep it light but some exposure is fine.

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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