Rotation continues. While many areas unwind we see rotation as usual. The transports hit an all-time high today, while the retail stocks held up very well, with transports allowing the market to hold basically flat lined. The S&P 500 holding the 1883 breakout for now. It appears the market is now in wait mode to see how those jobs numbers come in. In order to continue the breakout over 1883 on the S&P 500 with force, it seems as if it's going to need some further proof all is well with a decent jobs report.

I don't believe the market will be happy with bad numbers, using the excuse the Fed will protect them. The market needs to see some real economic growth if it's to see this breakout that's barely holding on continue to hold on. No excuses. Where's the growth. Let's hope we see it. It's good for the average person, but now the market is going to need good news to move in a good-news fashion. As long as rotation is upon us the odds are good, but we will need good news on the jobs front to hold this breakout and to get it rocking higher.

Let's talk about those two strong areas of the stock market today. They are transportation stocks and retail stocks. Think about the economy. Transports move the goods across America, while retail shows the consumer is still spending. Those are two key signs of a recovering economy in my opinion. I ask myself why are those two areas of the market holding up so well? Is the market starting to price in the improvement we're looking for? It does seem that way.

The market seems to understand what's going to happen long before it shows its hand. It's more than interesting that those two areas led the market today, while the rest of the market did little. All-time highs for transports. That definitely does speak to me in a way that says the market is pricing in a good recovery for 2014 for our economy. We can hope. Never argue with the message folks. We may not agree with it. That's understandable. But don't fight it.

Nothing has changed in terms of the markets potential negatives. Those nasty weekly-index negative divergences are not going to go away unless the market sells hard. I mean very hard. You would think it has to happen, but, for now, it simply isn't taking place. Hard to grasp, but that's the way it is. Never think something has to happen until it does. No front running. If you have, you've been slaughtered. Go slow. Play lower P/E stocks. Avoid froth. Be smart and you'll survive it. Nothing will be easy here. Sentiment is improving, but still is not good. The spread is 31.9%, but that's nowhere near the highs at 46% that we saw a bit over a month ago.

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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