The market was gapping down just a drop heading in to the trading day. Nothing to get upset about but, then came the news many didn't want to hear. Talks regarding Greece breaking down, which is not unexpected. The futures fell further still and down we went. Gap down and run for the most part. Not a terrible day by any means. Not a bearish day big picture by any means, but it was a decent down-day with Greece being one part of the equation along with negative short-term divergences being the other culprit. They were pretty large, and, thus, some selling could have been expected.

It would not have been nearly this bad today if not for the bad news from Greece but some selling was likely in order to work that divergence off. So the market once again lower and yes folks, the six month base continues ever onward. Annoying for sure, but that's life in this game. No end in sight, although the right tonic out of Greece would likely do the trick for those frustrated bulls. In the end today was a normal day in the large pattern to nowhere. Get close to the top at 2134 and fail. Wash, rinse and repeat. Now we'll see just how far down they take this beast. Nothing has been nor will it be easy. When Greece is finally out of the picture things should return more to normal, which sadly has been the same old market to nowhere, but at least the risk lessens. A day at a time folks.

The biggest headache for the S&P 500 in terms of breaking out has been the behavior of the transports, led down mostly by trucking and railroads. The bear market there continues. The airlines aren't nearly as bad, but that one area isn't strong enough to carry the rest of the sector out of its misery. The transports are going to need to bid soon, and it's not hard imagine they will recover in the not distant future since most of the companies inside that index trade at very low P/E's. If they get down enough they start to become more favorable to those who want good longer-term holdings.

For now, however, it's not in good shape and need to turn to help the S&P 500 out and get it on equal par with the small and mid-cap stocks along with the Nasdaq. The lagging is getting quite intense. The banks are also a bit elevated. Nothing bearish but they had run up quite a bit before some of the nastiness there today. The need to unwind along with the risk from Greece caused a strong pullback in many of those leading stocks but still nothing bearish. If Greece was resolved this evening they'd blast back up but if Greece does default there will be some real carnage in that area of the market. Just recognize there's some risk short term in the financial's if the wrong news hits out of Greece. The only real bad area at the moment, as i just said, is the world of the transports.

Bigger picture nothing has changed. We know the only two levels that really matter for the longer-term health of the market. A loss of significance below 2040 on the S&P 500 would be quite bearish, while a strong close over 2134 would be quite bullish. Any and all trades in between are merely noise as we wait for the winner to take a stand. Risk is higher than usual short term so pulling in the number of trades makes sense but do what feels right to you of course. I would keep things on the lighter side of the ledger. The market clearly wants Greece to go away so it can resume back to normal activity which should be more favorable to the bulls.

Day to day.

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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