What a day. We were down over 4% from the top on the S&P 500 just when those Fed minutes were ready to come out this afternoon. The market was already enjoying a strong bounce up when Fed Yellen came out and gave the market what it wanted. Low rates forever, it seems. Not hard to figure out since she hated what she saw around the world with regards to weakening economies. Global weakness along with weakening housing prices have her running scared, and when she's scared the market is very happy, because she makes statements she knows the market will just love. She turned more dovish again, and the market knows this means there's really not many other places to go. Folks bullied into a bull market continues, for now, although risk is still tremendous. Even though the market reversed hard today, it doesn't mean we're out of the woods by any means. We can back test the lost 20- and 50-day exponential moving averages and simply fall again, but I have to say that some of today's reversals were just stunning.

Today's action is not the type of action you see when a market is ready to fall apart. It was across the board as well. Not just a few places, which would make you wonder. It was totally across the board. The bears are no longer feeling good about things. All is not lost, but these reversals have to take away some of their confidence and believe me, it's understandable. You lose key support at 1950, or the nearly two-year uptrend line, and you think you've got the bulls where you want them, only to see it all go away after one Fed statement. It can't make you happy to be a bear, but again, all is not lost for them either. There are plenty of negatives to make the bulls nervous and to give the bears hope. All that said, today was a huge day for the bulls and those engulfing candle sticks.

Those bull-bear readings came out today, and yes, we did see a further erosion of bulls down to 45.55. But sadly for the bulls, we also saw an erosion of bears back down to 14.1%. This is a really bad number. The spread still a bit over 30%, but more importantly, where are the bears? Nowhere to be found, thus, the risk in the market remains quite high. When you add in very bad looking weekly index charts and no so great monthly-index charts the risk remains. The bears need to ramp up, or having sustainable upside is going to remain difficult at best. The market needs the bears, and with today's reversal they'll remain hard to find. In the end, you never argue with price but the real question is about sustainability as I mentioned. Having so few bears will make it a daunting journey to get us to rock up with force day after day. So yes, the Fed was there for the market today, but it also strained the effort to get more bears rocking in which is what the bulls ultimately need. Interesting times to say the least.

So now it has become a game of the long-term up trendline versus the 20- and 50-day exponential moving averages on those daily-index charts. The key numbers to follow on a closing basis are 1935 on the S&P 500 and 1973. I use a number below that trendline, because we did have a significant close below 1950 at 1935. So use 1935 and 1973. If we clear 1973 on a closing basis we have a close back above those two key exponential moving averages. And who knows to be honest. We close above quite a bit both ways lately only to see them get taken back out. Neither side really in control. It's tough here, but there are places where price seemed to have bottomed including the SPDR Gold Shares (GLD) and the Market Vectors Gold Miners ETF (GDX). No guarantee, but some areas at least found the type of sticks that may be able to ignore price. For what it's worth this is about as tough a market as it gets. Slow and easy.

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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