We have a very interesting market environment to say the least. There doesn't seem to be a single day where the market gaps down and runs lower all day. Every day it seems the market finds a way to go higher, at least intraday. Most days it closes green. We had a move down this morning, but, as usual, it didn't hold as the bulls came roaring back.

They're trying to get the S&P 500 to break out. This 2100 area has held it down for quite some time. It needs to blow through the 2111/2116 resistance zone so it can try to break out to new highs above 2134. The bears do fight harder every time we get near 2100, thus, in the bend we don't really go anywhere special, although the moves lower off 2100 are getting smaller and smaller. That's what really matters.

When a market is fighting resistance repeatedly, if you're bullish, you want to see the indexes hold close to price, while unwinding overbought oscillators. That's what we're seeing now. The moves down off of 2100 are tiny as things do unwind, so the bulls look as if they're getting ready to make the move they've waited for and haven't gotten thus far. It's been a long time, and that's why the bull/bears spread went negative for a while. Frustration was the name of the game, and, on some level, it still is frustrating. Bulls started to turn agnostic and walk away from the game. They wanted to see what would happen. When nothing did the spread tanked. That's actually good news if you're a bull, so now we're seeing the market try to lift off once again. It's set up to do so, but the bulls have to plow through this 2100-2116 zone to, at least, back test the breakout at 2134. Things are getting very interesting now. It's do or die time for the bears. They need to get very busy and to get busy now!

We had the much anticipated ISM Manufacturing Report thirty minutes in to the trading day today, and, thankfully for the bulls, it didn't disappoint. Nothing to get excited about, but 51.3 was better than the 50.6 expected. The market started to pick up momentum once the number came out. That was likely due to the fact that the Chicago number yesterday came in under 50.0, which is not good for the economy. Shows contraction, thus, I believe it was a major relief to get this type of weak, but not below 50.0 number. The bulls as usual ran with it. Nothing spectacular, but better than the market had been prior to the announcement. A weak economy has no meaning to the market. It's running up on low rates, thus, anything else is pretty much meaningless, unless, of course, things were really bad, and a number slightly above 50.0 is not a disaster. Not good, but not a disaster, and that's all the market cares about these days.

The bull/bear spread had its biggest jump higher in several months this past week as the spread widened to 21.7%, bulls over bears. Last week's bullish market action is starting to bring back those agnostic bulls who left the scene a while back. They see the market holding better near resistance, and want to be part of the next up and out move. Who knows if they'll get it, but they like what they're seeing, so they're coming back for a hoped-for party in the days and weeks ahead. Only when the spread gets back over 30% do we even raise the first red flag on sentiment. Normally, it can take over 35% to get the market too frothy. Last year we saw readings well over 40% before we hit the wall, so the bulls need not fear the latest ramp up in bullish behavior, but it will be interesting to watch it as the weeks move along. It should explode if we break out above 2134 on the S&P 500. Day to day for now as we await the break, first above 2116, and then the attempt at 2134.

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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