Even though there was the usual language of maybe we should raise rates sooner than later. The market is smart enough to understand that raising rates isn't in the cards for a long time to come, and even it was raised, it would be done very slowly over a very long period of time, meaning there's still nowhere to go with your dollars other than the stock market. The bears, and anyone looking for something other than the status quo, seem to be wasting their mental energy. Even Fed Yellen said last month that when housing and employment is where they want them to be, they will still keep rates at historically low levels.

She trusts nothing and doesn't want things to fall apart if she's lucky enough to see things come together for once. No chances being taken. The market isn't fooled by language or threats about things. It knows the truth. It always does. Rates will remain low for longer than they should. It may not be right. It may not be appropriate, but it is what it is based on fear of an economy that can't do things on its own. It doesn't matter if the thinking is correct or not because all that matters is the action taken and that action has been, is, and will likely continue to be that of extremely low rates in order to try and keep the market moving higher in the months to come.

The market tried to sell off some today as the futures were lower across the board. The market came in to today at extremely overbought levels on the short-term sixty-minute charts. The bulls, however, wasted little time in gobbling up the selling which allowed the S&P 500 to test up at the old highs at 1991. The high today being 1988. If we can close over 1991 then it's likely we'll have a few shows on the business channels celebrating the move 2000. The froth ramping up once again after we get, if we get, a close over 2000.

The fear of missing out on things moving much higher will overwhelm folks, and then you'll see that spread ramp higher once again. It's astounding to watch how rapidly the bulls move in once there's any type of selling. The back test of the moving averages were interesting since there were gap ups in the pattern, which led me to believe we'd get through them. No small candle sticks up, but gaps, and that was suspicious if you were looking for failure at those moving average tests. For now we stay with the trend in place knowing risk is extremely high. We closed at near 80 RSI levels on the Spy this afternoon, so even that adds to the short-term risk. Be careful over playing.

The bad news in all of this of course is froth. The bull-bear spread got to 30.2%, but is now back up to 33.3% as of the close of last Friday's trading. I'm sure we're rocking higher still with this week's current action moving the markets upward. It won't take long to get back near 40% should we break above 1991 and close over 2000 for a while. The bull-bear spread remains as a massive warning to the bulls, but that's mostly being ignored. There will be a time when it shouldn't be, so keep that in mind. It's not healthy to see the 30% level as the lows for the past several months and even worse to see it heading back towards 40%. Just make sure you recognize that there will be a steep price to pay some day.

Until then we keep the long side of the trade as really the best way to go about things. 1991 is resistance while 1956 to 1948 is great support for the short 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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