The market looked to finally start a sell-off on Thursday as there was a strong gap down after Mr. Bernanke spoke on Wednesday. The gap was the real deal as many leading stocks broke down below their 50-day exponential moving averages and did so on confirming volume. Finally, said the bears. Something we can dig our teeth into. The bears were feeling as if they finally had the bulls on their knees. A sustainable pullback was imminent. Or so they thought. It doesn't mean it won't happen, but today we saw a decent gap up that extended throughout the day with the market basically closing on its highs. The bulls are doing what they've been doing for a long time and that's to buy every single dip because they feel things can't go bad for them. And who can blame them.

They're playing the Fed Bernanke bull market knowing that he's on their side, and thus, why not, buy away. It doesn't matter that things are overbought. It doesn't matter that we could desperately use some downside action to unwind things. Just buy away and stick with what's been working for a very long time. Hard to break a habit that feels good and one that has been working so it's understandable for sure. The bulls won't stop trying this until something comes along to break their backs. The onus is on the bears to break the trend in place and until they prove they can put some fear in the bulls, all selling episodes will quickly be gobbled up by those bulls who haven't taken a break for quite a long time. Fear not their mantra right now. The bears need to get busy as we approach the old highs on the S&P 500 at 1576. For now the selling on Thursday was a one day event. It should have led to more but simply did not.

This entire bull market has been driven by the action of one man, Fed Bernanke. Based on that, whenever the Fed meets, the market listens very closely to every single word. It's looking for a hint that he's about to change his policies in place regarding interest rates and the constant supplying of liquidity. If the market catches even a whiff of either one going away it would fall very hard and very quickly. The bears hoping that his words on Wednesday would lean towards change. They didn't. he said the same thing that he has said for ages. As long as unemployment is above 6.5&, currently reported at 7.7%, he's going to keep the liquidity machine on and keep interest rates near 0%.

In other words, it's forced market participation by the masses. With no other place to get growth, he's forcing everyone in to the market in order to keep the economy growing. It's very slow growth to be sure but growth nonetheless and that's all he cares about. With all of this in place, the bull market, interrupted at times by pullbacks, should continue on. Only when he says the liquidity is about to end and only when he says we're about to start an interest rate hike cycle will the bull market quit. All pullbacks, therefore, are buying opportunities for now.

If you want to understand the power of a bull market you need look no further than what took place Wednesday night. Oracle Corporation (ORCL), the leader in the software space along with Microsoft Corporation (MSFT), reported an absolutely horrible earnings report. Warned on the future as well. The miss was very significant with the stock down nearly 10% in one day. Yes, I said 10% in one day. With that type of action you'd expect the market to free fall down. it got a decent down day and that was it. While the entire software world took a massive hit, the rest of the market simply rotated the money around to different places. No mass exodus from stocks overall. Just rotation. This process has been around this entire bull market. Whatever is bad for a bit of time is ignored and sold hard but then other sectors take over. The key ingredient to any bull that has a long life attached to it. It took only one day to recover from the debacle. Only when things fall throughout the entire stock market world will the bears have anything worth talking about.

S&P 500 1576, or the all-time high intraday print, is within sight. Less than one percent away. Great to see that if you're a bull because of that can get taken out with some force, the market has blue sky and go wherever is wants in terms of price. No resistance above. The bears will fight this level with force, at least one would think so. The Nasdaq is very close to taking out that gap it tried earlier in the week at 3249. A move above that with force on a closing basis would be huge trouble for the bears. Apple Inc. (AAPL), the leader in technology land, is looking better technically. If it can close over 463 or its 50-day exponential moving average, it can carry the sector higher and through the gap with force, It close only two points below thus the bears better get working quick or the stock will break out with no real resistance until 480. a day at a time but we're close to breaking out here on the Nasdaq and AAPL may lead the way. Interesting times for sure.

Oh, we are still lofty on those weekly and monthly charts, but stick with the trend until we see the proper reversal.

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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