All you can do is learn. We had a very intense move lower on the indexes across the board led by the technology stocks. In good markets the technology stocks lead up and in bad markets they tend to lead down as the appetite for beta is always there when things are trending one way or the other. Off the top there was no question that beta led down although we are not seeing beta lead up on this particular move which is somewhat interesting.

However, it started to play catch up big late in today's session. When markets correct they often do so in a fashion that leads many to believe the end of the world is here. Sharp quick moves lower that totally scare folks thus getting sentiment problems to reverse. We had a very bad sentiment issue thrust upon this market three weeks ago. Two weeks and 7% down in the markets later this market looked awful. Since then we have bounced back up to resistance or the 20- and-50 day exponential moving averages on the S&P 500.

We closed just a few points below thus the job for the bulls here is to hang close for a while and then burst back through. We may need a little time due to the fact that we're very overbought on the 60-minute charts. I guess we could always gap over and stay there but after a strong run such as we had the past few days, it would best to cool off a bit before moving higher over those critical moving averages. That won't be an easy chore for sure as there was lots of volume at the time we lost those levels. Normally, when you have a strong volume burst after losing critical support, you're going to struggle a while before being able to blast back through. There are reasons for optimism here but there's also reasons for caution and I will discuss them in a moment.

Today was constructive for the bulls no doubt but they still have to contend with the 20's and 50's just above at 1109/1107 respectively on the S&P 500. You try to look for signs from leaders about whether the economy is truly recovering or not. The United Parcel Service (UPS) CEO says that the recession is over. Who am I to argue with a man who deals with a global operation? He said things are strengthening everywhere he looks no matter what point on the globe we point to. If this is true, if it is really true, then the market will move higher this year. Of course this is open to debate as many companies are not declaring such enthusiasm. On the other hand, more and more are reporting great earnings. Look at the real estate group today.

We have that chart tonight. it just burst on better than expected earnings from many within that sector today. Whirlpool (WHR), get your Whirlpool's folks. This stock just burst out on earnings today. These companies are saying things are getting better and better. No reason for them to get overly optimistic and then disappoint the street later on. They legitimately feel things are rocking up here. Then earning's season has been strong. If this trend continues for another quarter, the market will trend higher and higher.

If we look at the daily charts we can see that stochastics are still basically at or near oversold. RSI's no longer are but they are still further down the chart than anything else. 40 RSI's are far from too high. So on the daily front, the market is still capable of big upside. The 60-minute charts are now overbought with stochastics in the mid 90's and could use a pause. However, if we pull back some and the oscillators don't push down hard we are likely to shoot back up. The daily charts are fine. The good news with the 60-minute charts is that the oscillators did impulse or push up hard during this rally and that bodes well for the future. It tells us that any move lower in the market is likely to create positive divergences on those charts. No guarantee and we'll watch that as it unfolds. However, the prospects are good on any selling.

On the down side of things it would be best if the Nasdaq stocks weren't under performing so badly on this first rally off the heavy selling. Many big leaders are dead in the water for now. Stocks such as Amazon.com (AMZN), Apple (AAPL), and Google (GOOG). Qualcom (QCOM) can be thrown in as can many more. This is not good to see and does raise some type of red flag regarding this rally and also tells us why the Nasdaq has so lagged its brothers and sisters upward. These stocks need to get going or the market will not make the move over key resistance right above. If the market sells off some steam from those 60-minute charts it would be great if those stocks actually held their ground and then started to lead up.

I said I thought this would be a correction and not a bear market. I talked about needing to drive sentiment way back down in to the bears camp and how some selling would get that job done. it has and I will be shocked if it didn't run down even further when we get the news tomorrow morning based on what took place in the market last week. With the sentiment issue likely now out of the way, the odds are solid that we will begin to once again head back higher. Nothing is guaranteed and I will watch the next push lower for confirmation from the oscillators but things are looking better.

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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