I know it must seem impossible to many of you. In fact, it must seem impossible to the masses. But there is nothing bearish on those weekly candle sticks other than overbought, and we all know by now that overbought unto itself is not a sell signal. It tells us to be extremely careful, but overbought is not the same as distribution volume at tops. It's not the same as good news being sold, and it's not the same as nasty negative divergences.

It's just overbought. Please keep in mind that to get overbought you have to be powerful in terms of upside to begin with and it must be sustained over a long period of time. The market likes what's taking place on two major fronts. First, we have solid economic news coming in from just about everywhere. However, the two most important reports keep on getting better.

The ISM Manufacturing Report was very strong this past month as was the Jobs Report, a powerful weapon for the bulls and the sustainability of the bull market. The bears need a catalyst, it seems, just to get a decent pullback under way let alone something bad happening from overbought. The second thing the bulls have on their side is even more powerful than the fundamental news from the jobs creation world and accelerated manufacturing.

Liquidity and low interest rates from the Fed. Nothing is more important. The Fed is forcing the world into the stock market. No need to spend a minute on whether it's right or not. It is what it is. The Fed has a plan to keep the economy rocking higher through stock market wealth, and there's nothing out there it seems that will change his mind any time soon. Yes, there is much more risk up here at overbought, especially when it's across the board for all intents and purposes on the daily, weekly, and monthly charts. That said, there is still no reason to think that other than a normal pullback ahead that the market won't try higher over time. We need selling to help unwind, for sure, but for now, it hasn't kicked in.

Pay special attention this evening to the weekly charts posted. Notice how none of them had poor candle sticks this week. Full sticks. No sign of topping. It can top at any time, but no classic topping sticks anywhere to be found. Also, pay special attention to how the Nasdaq may not be overbought yet simply because of the massive under performance in Apple Inc. (AAPL). However, when you study the AAPL chart tonight, notice how close it is to a very powerful breakout above trend line resistance. If that can somehow gap over that level early next week, it'll help the Nasdaq to seriously outperform the rest of the indexes meaning the markets should move higher still.

If AAPL gets rocking, the bears will have a new enemy to deal with. And when AAPL gets a bid, it can be very tough to turn the buyers away. Especially now since the stock has been crushed since last September. A break above that trend line would put the AAPL bears to sleep, and thus, the Nasdaq would likely rock higher from here. I know we're all wondering when things will fall apart here from overbought, but if AAPL gets going, look out above for a while longer, whether it makes sense or not.

So you play what you see. Again, make no mistake about it that sentiment is starting to get a bit out of hand. Nothing severe yet, but it's starting to ramp in that direction pretty quickly. Bears are down to a very dangerous below 20% reading at 18.8 coming in to this week, and it's likely it only went lower after this week's action in the market. Historically, levels below 20% make it very tough for sustainable upside action. It can always be different this time, but don't count on it. At some point soon, we'll need a more intense selling period to unwind that optimism and create more pessimism. That said, we don't know when that's likely to kick in. Stay with the trend in place. The S&P 500 is trying to blast through the all-time intraday high of 1576, and then possibly head to up trend line resistance at 1590.

One day at a time as we study and learn. You can buy some if you find the right set-up. Just keep things appropriate.

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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