The market clearly has its head down as it's trying to stay overbought for the most part. It's been overbought quite a bit lately on two, key-time frames, the daily and shorter-term sixty-minute charts. There's a bit of selling and then the market tries hard to move back up. This process can't last forever as we all know but you can't know exactly the moment when the pullback will begin in earnest. Today was somewhat of a pullback day, even though it wasn't. Let me explain. The advance-decline line wasn't very good, but had green because just a few stocks carried the work load. Not the best action for the bulls. You want to see the majority of stocks working higher when you're in a confirmed up trend. When things get more top heavy, there are fewer and fewer stocks doing the lifting. We saw that today, but it is only one day, so no time for panic on that front yet.

International Business Machines Corporation (IBM) carried the Dow while Google Inc. (GOOG), Intuitive Surgical, Inc. (ISRG), and a bit of Apple Inc. (AAPL) carried the Nasdaq. The S&P 500 lagged because the earnings there weren't as strong. Texas Instruments Inc. (TXN) and Coach, Inc. (COH) disappointing there. With that the S&P 500 basically touched massive resistance at 1500 (1496). If AAPL is strong, we may see the Nasdaq try and carry the S&P 500 above that level tomorrow. But if it does, it will make the indexes very overbought on the daily charts. It'll all unfold as it should, but for now, the trend is higher. Expect a strong pullback soon no matter what, but the trend is higher, bigger picture.

Understand, even if you're a bear, why we keep moving higher overall. You can talk about Mr. Bernanke in many different lights, but the key thing is he has intentionally made interest rates low. He's making sure they stay low for a long time. There's just nowhere else to put your money if you want your money to work for you. His actions allow the markets to do well, and thus, keep the economy alive.

If Mr. Bernanke thought things were truly strong he'd raise rates, and thus, the market would fall over time when those rates got high enough to allow folks to be happy with those levels, thus, keeping their money in the bank. You won't be seeing that for many years. He won't do anything until he feels things are safer, so the bears are going to need some real patience before they get their next big bad swoon down. Always pullbacks along the way, but the Fed is making sure, as best he can, that the bull hangs tough in order to protect the United States from a nasty recession.

The market is zeroing in on the long-term trend-line resistance on the S&P 500 around 1500. In time, we may take it out, but keep in mind, where those daily oscillators are at. MACD's are very extended. Stochastic's are at their tops. RSI's are all at basically 70. Small-caps and mid-caps are in the 70's. Some stock leaders are near 80. It'll all snap in time to allow for some unwinding to refresh.

When it does snap, it can be pretty violent, but it does not mean the bull market is over. So please keep that in mind. You'll all be glad when it unwinds as it'll allow for more trades with less risk attached. Right now, due to those lofty oscillators there is a lot more risk to any long side trade. Not easy to short, however, as the trend is clearly to the up side. It's best to take easier until the market finds a way to unwind and refresh. The trend remains your friend, as they say, and that trend is higher. Always pullbacks.

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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