The market wants to correct. You can feel it. It has a pulse. It has an energy. The problem thus far has been the constant burn the bears have felt every time they've tried to front run. You can see the market struggle for every point as the daily chart oscillators are starting to weaken as we grind higher. As the market moves up, the MACD is not. The RSI and stochastics aren't forceful, but the MACD is the real problem child in the world of momentum oscillators. They are screaming for a pullback of some kind, but it'll take something to kick start the event. Maybe it'll be tomorrow's ISM Manufacturing Report.

It may be much weaker than expected based on the terrible GDP Report we just received. Well below expectations, they are showing our economy is in recession. If the ISM Manufacturing Report is well below expectation it may be the catalyst the bears have been looking for. Then again, it may not. I give up trying to fully understand what it will take to get this market to at least pull back some, let alone experience a real correction which it desperately needs. So today saw Apple Inc. (AAPL) lead the way up and keep the NDX performing better than its sister indexes, the S&P 500 and Dow. Nothing, and I mean just about nothing, else was worth watching. Lots of low volatility with little action worth following. Maybe tomorrow bears. Maybe tomorrow. Maybe not. In the meantime, the grind keeps on grinding on.

Following the bouncing oscillators is a very important thing to pay attention to on a daily basis when the market is grinding and stretched. It gives hints. Take a look for a moment as the MACD on the major daily index charts. Notice how weak the MACD is across the board. It doesn't breed optimism. Elevated, and in many cases, trying to cross down. Would scare me from getting aggressive on the long side. It doesn't say to short, but it does say you better be careful and not let your guard down. Can we continue to grind about with these types of oscillators? You bet we can! Can we fall hard? You bet we can! I refuse to allow any of you to let your guard down. We may grind for weeks more. We may collapse at any time. Or we may simply just pull back for a week or two, with more of a grind lower. The key thing is to realize that things really aren't safe, so just be aware. Oscillators don't lie. They can deceive for a while, but they don't lie big picture.

We have a shortened week due to the July 4th holiday. Normally we hear of how bullish these types of weeks are. NEVER play the market from that perspective. Always play from what you see, not what you believe has to be the truth. We are not set up all that bullish even though we can grind higher. That said there's no rule to guarantee upside, because it's a holiday week or because it's now the beginning of a new month, and that fund managers will be chasing the best names. All a load of nonsense. While there is some truth to that, it doesn't always apply. It can, but again, please be careful with how much exposure you put on based on market belief systems.

For now we hold some exposure, and we do not buy strength. Respect the game, and it'll respect you back.

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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