The market had a nice bid underneath it this morning pre-market. S&P 500 futures were up nearly seven points with the Nasdaq up double digits. The S&P 500 had a double top of horizontal resistance at 1434/1435. It looked as if the S&P 500 was going up to test as it waited for the ISM Manufacturing Report to come out. Thirty minutes into the trading day we got the number. Anything above 50.0 shows economic expansion, while anything below 50.0 shows contraction. The market was expecting a number a bit over 50.0. It was nothing to get excited about or celebrate, but a number over 50.0 nonetheless. The market wanted to see economic growth, no matter how slight it was. 49.5 was the number that came in. Not good.

Remember, this is the number we're dealing with after being stimulated by Mr. Bernanke, with three QE programs. Can you say it's not working! I can say, for sure, it's not working. It never had worked. It never will work. The market fell hard right as it was near the breakout level. Down it went slowly-but-surely all day. Strong gains early in the day became medium sized losses by the day's end. Typical as the disappointment goes with the constant whipsaw to nowhere. We look good but we fall. We look bad but we rally. It's getting old for everyone. Not going away any time soon. It was a strong day for the bears as they defended S&P 500 1435. Now the bulls will try and defend 1402. More on that later on.

You would have thought that Japan would have been our teacher. Their economy went into free-fall after doing the same type of things we did here in the United States. Bubbled themselves into oblivion. All bubbles burst, and when theirs did, their stock market fell hard from 37,000. After eleven attempts to stimulate, such as we have with three QE programs, it worked to rally their market briefly, only to see if fail in a colossal way. It fell 30,000 to 7,000 points over several years. You can't stimulate with free cash if there's no one to take it. Lack of jobs, fear of losing their jobs, and the inability to even qualify, are a few reasons why the free cash doesn't work. Risk off for the general public and for small-to-medium sized businesses. You can probably throw the big timers in there as well. Just too much risk.

With Fed Bernanke saying he's about to do QE4, you have to wonder what runs through his thick skull. It doesn't work. It's not going to work. It creates nothing but headaches. Adding in debt. That's what it's good for. Very nice. He just won't allow for the markets to work things out over time Falsely hold up the markets. Why not! In the end, nothing he's doing or has done has worked at all. He has created inflation where we don't need it. He has created debt we don't need. The market won't succeed through his actions. He needs to let go.

The fiscal cliff is boring already, but it looms out there like a bad dream you can't force yourself to wake up from. It's all we hear about. For crying out loud, CNBC puts it on their screen often, showing how much time is left, down to the last second. As long as it's out there like an open wound, it's likely we'll meander back and forth. With interest rates so low it seems the market has some protection. You never know, though, for if the problem isn't solved in time, and taxes hit this economy in a big way, we could fall very hard down the road.

That's an unknown for now, but the babies who lead our country are still crying. They fight and bicker. Big idiots. Instead of trying to solve a dire situation, they fight and let their egos get in the way. Good job boys. Good to see you won't change the sadness you have all always been. Let's hope they get a clue in time to save the market and what may be left of this economy. If we lose the market, the economy suffers along.

The S&P 500 has massive support at the 20- and 50-day exponential moving averages at 1408 and 1402, respectively. If we break below once again, it may not come back so fast next time. You can only lose these strong support levels and recover but a few times. We need news that can take us over 1435 or the pervious double horizontal resistance top. The close today was poor based on the ISM Manufacturing Report. The bulls will try to hold the market up until it can get some potential good news Friday from the Jobs Report. If that's a bust we could be in some real trouble.

One day at a time in this very difficult 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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