The bulls will take a quiet day after yesterday's big move up. There were some bad economic reports this morning, especially on the services side of the economy, barely holding above the flat line that separates growth and recession. The market is just not seeing the type of economic growth one would have expected by now when you consider the measures taken over the past few years by the Fed. One can only imagine how bad things would be if they hadn't done anything. The good news for the market is the Fed Yellen won't be raising rates any time soon. They are also unlikely to pull all the liquidity out of the system any time in the near future. That may be slowed down for a while.

So yes, there was bad news, but it did little to knock the market back down simply because the market is more focused on the Fed than anything else, right or wrong. When you have a big up day it's normal to have a day or two to digest the move. If we don't fall hard by tomorrow that would be good news for the bulls. However, one caveat. We have the Jobs Report on Friday, and that number could hurt the bulls for a while. But we just don't know what to expect. If the number is favorable, meaning not too hot or cold, it could be the medicine for further upside. Friday is huge, thus tomorrow will likely be fairly quiet as well. For now, a quiet day or two is not bad news for the bulls at all.

The financial stocks are always important to watch. As they go, so, too, goes the market for the bigger picture. If the financial stocks are breaking down it's very hard to get the market as a whole to break up and out. The financial stocks are now seeing lots of great moves and breakouts, including our Bank of America Corporation (BAC) play. Very bullish when they make moves on big volume, such as BAC did today.

When big money is defending a breakout move you have to like it for sure. When the financial stocks are doing well you may want to think twice before front running short positions simply because we have a sell signal on sentiment with the spread at a nasty 39.55 more bulls to bears. That will kick in at some point, but you never know when. With the financials doing well it may be a while before that selling kicks in with force. The selling could come tomorrow, but the moves these financial stocks are making says be careful getting too bearish too quickly.

For now it's still best to avoid froth stocks as many of those taught nasty lessons to the froth followers today. It takes just one day in the wrong froth stock to make your year very difficult. The market is fine, but with risk much higher now due to sentiment it's best to keep away from froth and focus on the better money making companies. Staying long is the way for now until we get the gap down that runs lower and closes at or near the lows. Don't over play, but keep some scratch in the game for now.

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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