The bulls tried very hard to blast through 1656. The confluence of two-key moving averages and gaps couldn't keep the bulls from getting through with some force early on as the Jobs Report came in just right. Not too hot and not too cold. The Fed likely to keep pumping, yet the economy not slowing so badly as to think things are falling apart. The bulls couldn't have asked for more. So the question was would the bulls get through 1656 and run higher or not. The answer was not.

They tried very hard with the day full of huge swings. As the day started off with a gap up it didn't take, but a few minutes for a nearly two-hundred point reversal down on the Dow to kick in. The whole market did a gigantic reversal lower. It looked bad for the bulls, but it somehow didn't hold for the bears either. The bulls charged back and took the market to new highs. So there it was. It was right there for the bulls who laughed at the massive reversal lower. The market was at the highs. A few hours to go.

Just close the market they thought. Let the bears stew on this reversal as we are decently over 2656 and headed towards 1680. Nope. Not meant to be as the bears came in late taking the market well of the highs. No clean breakout on this day. Crazy swings both ways leaving both sides feeling exhausted and frustrated. Can't blame them either. Both sides were positive that they held the other side hostage at several times during the day. I'm tired just from watching it. So here we are 1656 all over again. You have got to be kidding is my first thought, until I recognize that this is exactly what the big boys and girls want. A confused and dazed trading world. They've succeeded in their quest. Keeping it ultra-light for now is the only to play after today's insanity.

Knowing and understanding where a market is on its journey is the key to any form of success in the stock market. When to get aggressive and when to step aside are paramount to trading survival. Waiting to deploy your dollars when the risk reward is stronger is how you actually do survive this game that takes many out each and every day. The market is still in bull mode but in the agnostic phase of that bull-run. It means whipsaw is the way. Something I have been talking about for quite some time now. You have had ample warning on this subject.

Remember many weeks back when I said sustainable upside will be difficult for some time to come. So many weeks have passed since that statement that the frustration is now high for the bulls. That's why the bull-bear spread is now down to 13% from 33%. That said there is still no blast off from here. We have a reasonable chance of moving decently lower from here as we've only pulled back roughly 4% on average. The pullback may double up from here. The key is understanding the levels that would allow for more buying or selling. When you over play an agnostic market you will have a very tough time of it. Be patient and wait for the market to send out a strong longer-term buy signal down the road. Your patience will be appreciated by yourself when that time surely arrives down the road.

So there's really only two levels to talk about when looking at this market short-term. A strong close over 1656 would allow for a move possibly as high as 1680. Strong gap exists there, thus, getting through 1680 would be very hard if we were lucky enough to get there. On the dark side, 1627 is a double bottom. If that level gets taken out on a closing basis we are likely headed to gap support at 1606. If that goes away there's gap at 1592 and the 200 day exponential moving average at 1579. All these levels are quite possible. We have to see what breaks first, 1656 or 1627. Anything in between is nothing but noise. Until we know for sure, keep it lighter than light. Live to play another day.

Have a nice weekend!

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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