In a normalized market it would be falling apart. The bull-bear spread is now at a ridiculous 45.4% with the bulls a hair shy of the magic 60% level, currently at 59.5%. Historically markets don't pull back from these levels. They crash. Nothing short of a massive, unexpected, out of the blue free-fall lower. We know why it's not happening yet. Fed Yellen, and all the global bankers, are working in concert to keep rates low and liquidity high, but rates at the low end is the real key to why we're holding up.

There is no historical past to look at when deciding when the market will give it up, but we did see a 10% correction last time we hit 46.4% which is only 1% away so at any time the risk is there for some very serious selling. We have now gone a full year at high levels of froth except for two weeks last October. I feel bad for those fully loaded who get caught at the top when this thing snaps. It'll have no mercy. That said, there are still no confirming signs that things are terrible and about to fall apart. Nothing at all. Like I said, there are usually no signs so buyer beware, but again, there's nothing I can see suggesting it's time. We'll only know as the days move along.

The real reason for the market falling some is that the leaders have gotten absurdly overbought with many stocks snapping today from RSI readings on their daily charts at 75, or at times, 85 and higher. It's just sustainable, thus, you get some big money selling to take gains, and that causes the market to sell more than froth. Apple Inc. (AAPL), as well as scores of other stocks, pulled back hard late in the afternoon today, and this, more than anything else, caused the selling to take place. But really, is this selling? Not to me it isn't.

It's just normal noise in the ongoing bullish process. Nothing suggesting this was froth oriented. No snap of any major proportion on massive volume. That's what you need to see. The market is still moving the dollars around. When one area of froth sells it doesn't leave in total, but follows through to some other area. That will have to stop before the market is totally ready to give it up. Rotation is the name of the game and that may be the biggest hint that things are about to head south. When it stops. When oversold or pullbacks are no longer bought up instantly that's probably the message for which we're looking. Nothing bearish took place today.

In a perfect world we'd all be raising lots of cash. But you have to stick with what's working and stop worrying about what we think should happen based on historical data. Every market is different, and since Fed Yellen, along with the other Fed Governors of the world, are holding things together with promises of low rates and lots liquidity, there's no reason to play differently. Don't play the short side, or worry about the market tanking, until we get a price and oscillator confirmation. That said, never lose respect for the market and what the potential message is saying. Caution is warranted. Stay long 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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