And what it heard it mostly liked. He talked about how our economy is not in all that bad shape. Not in very good shape, to be sure, but not so bad either. He talked at length about the headaches in Europe, and how those headaches could adversely affect all of us here. That was the troubling part of the speech, but he also said he has tools available to him should the worst case scenario take place in Europe in order to protect the United States from crashing into a recession. He didn't state what those tools were, but somewhat hinted it wouldn't be a QE program, which I think the market liked as it showed no real panic about the condition of things here at home. It was good to hear him say that things here weren't as dire as they were in previous months. He was clear to state that we have a long way to go to get where he'd like us to be, so we shouldn't feel too good about things.

He was clear to tell us that the worst seems to be over for now, and that it was up to each and every one of us to behave appropriately by paying off debt and having a real plan on how to make sure we can pay our bills on time, and to not act in a fashion that makes things too tough for us financially. Basically it came down to telling us to be responsible for what we do and to not over extend ourselves as we did before. He made that point a few times. Telling us to make sure we don't act as we did in the past so as to create more problems. So the fed spoke today as the market definitely listened, and it seemed to like what it heard overall. The big headache still being Europe, but hopefully, that will resolve itself sooner than later with the measures already in place and other measures to come.

The market seemed to want an announcement of another quantitative easing program today from the fed. It didn't get it, and acted like a disappointed child not getting more ice cream. The fed said things weren't that bad here economically, and thus, made no mention of a QE program. This caused the market to sell off over one hundred points of its earlier gains. It seems as if the market is begging for something it doesn't need at this moment in time, and kudos to the fed for not doing it. After the disappointment wore off, the market rallied back some into the close, although well off the day's highs. Nothing great and nothing bad. The market needs to realize that not acting out of desperation isn't a bad thing. It always wants more, but gladly, didn't get it today.

The market should trust the fed's actions and know that he would be the first, based on past history, to put in a new quantitative easing program, if he really felt it was a necessity. He has acted rapidly in the past to put these types of programs to work, so now the market should trust his actions, or lack of them, happily. The recovery at the end of the day leaves things wide open for the market in the very short-term, but that's how things are these days. The market wanted more candy today, but got only a few pieces of gum. Not happy at first, but then realized that gum isn't a bad alternative. Neutral for now.

The market fell hard the past two days, but really didn't cause anything negative in terms of the technical set-ups. It's easy to just say the bullish case is over once you sell hard for a few days. That's understandable considering the fundamental backdrop we're all dealing with from Europe on a daily basis. However, if you study the leading stock charts and the leading index charts, there still isn't anything bad in terms of technical breakdowns. The charts aren't as healthy as they now have gaps to deal with, and I respect that, but we all know those gaps can be taken back fast, if the right news were to hit.

On the other hand, if the wrong news hits, such as a default, you can kiss the good technical set-ups good-bye. There was a lot of good support levels created on this last strong run up in the market. That won't be easy for the bears to just make go away. Some of these gap ups occurred with strong internals, such as volume and powerful advance-decline lines. So yes, the bears did make some headway, but no, they have not made the type of headway that guarantee's the market's demise. Europe will have a lot to say about which way this breaks.

There is a lot of support on the S&P 500 on the way down from here, but the key level of support for the S&P 500 to hold is clear as can be. It's the 50-day exponential moving average currently sitting at 1210. If the bears can remove 1210 with force then you'd have to hand the ball over to them as they would be in clear control. I'm not talking just your average daily breach of this level. I'm talking about a forceful move that can hold for a few days, thus, giving the bears more confidence.

When the market cleared 1260 it didn't last long, and thus, no confidence was there for the bulls. If the bulls can take back 1253/1260 with some force, it would be the second time through, and likely give them more control of the action short-term, although we all know that the daily news out of Europe is what's really controlling things. The market may want to play ping pong for a while here as it awaits the final chapter from Europe. Be patient, meaning not too much exposure either way in such a whipsawed environment.

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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