Stable is the best word I can find to use for today's action. The bulls tried a few times to run away with things while the bears made a few attempts of their own. Back and forth they went. In the end, the bulls held their own when you consider how overbought we are. We seem to be staying overbought, and thus, the bears have yet to take advantage. You have to wonder when they will, but for now, they have been unable to get any sustainable down side action going. It seems almost as if they're fearful to even try, getting tired of shorting. It hasn't worked as shortly thereafter they're forced to cover. If you get pounded on your head over and over you would think you'd give it up after a while.

Why put yourself through it! It seems as if that's where we are. Even with stocks like Apple Inc. (AAPL) entering back in to bear market territory, the bears can't make much headway. Not what we would normally expect, but with this market continuing to rotate, that's the way it has been with no sign of that changing any time soon. Today yet another day in the bull market with S&P 500 1597 holding extremely well for yet another day and every day that goes by adds strength to the bullish case that's currently out there.

Let's talk about overbought a bit. The market is overbought and when it's overbought, under normal conditions, you'd expect a decent pullback to unwind things. Makes sense and most would naturally welcome it so as to get better buying opportunities. It's also healthy to let things cool down so as to not create too much froth. However, things are a bit different here. It's a lot harder to predict when some stronger selling will ensue simply because we're on breakouts. When you break out over key resistance you get the bears on the run, and as I stated before, they are more fearful to short as they've had one bad experience after another. Breakouts can allow overbought to stay that way a lot longer than most would think possible so yes, we will get selling but hard to know when it'll kick in hard. Breakouts fool the masses. That's just the way the big money likes it.

Some very bad news today from economic leader Deere & Company (DE). Stock hit hard on a bad warning for the next quarter. The stock got smoked yet the market didn't. What used to happen was the entire system would get hit when a leader got hit on bad news. Anyone associated with DE would get creamed such as that stock did. Not the case again here and that's really amazing. You'd figure if there's trouble at the top, how can the little guys survive. The answer is the Fed. The market wants higher, and thus, knows it can't hit the whole chain and amazingly ignores what would normally be a real problem for the whole system.

Bad news is treated bad only for the one and not the many. Unusual but that's the new game in town. In time you can bet DE will heal up very well. It'll take some time but it'll get its footing probably not too far down the road. Probably long before the next earnings report comes in three months from now. Just the way it is these days. Only when the Fed says it's ok to hit everyone will everyone actually get hit. That's the game. Accept it. It's been that way for far too long not to recognize it. That said stay long but with caution when at overbought. As long as we're trading above S&P 500 1597 all is fine longer-term.

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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