Stock Market Bulls Keep It Moving Higher...

By: Jack_Steiman

Nothing seems to derail this market. This is why you always stick with the trend in place until you get the type of reversal stick, or sticks, over the course of many days that says the trend in place has ended. We have come very close quite a few times to seeing that take place, but we have yet to see it actually occur. The game will test you mentally day after day. That's the real problem with trading instead of longer term investing. Long-term players don't get, or have to get, emotional since they aren't really following things daily. Traders not only follow daily, but many follow minute by minute. The market hasn't made the big move up and out over 2119 yet, but it's working its way up there.

That doesn't mean it'll get through. We know the market has given a large number of head fakes both ways, and with the nearly four percent spread on the S&P 500 still in place, you can't get too excited until it finally goes away. It's been five-long months for both sides. Yes, we're closing in, but we are not there yet. The bears will definitely fight as always. They've done much better over the past five months. Before that there wasn't even the simplest of efforts to defend resistance levels. Now they're fighting. Bottom line is things are stuck big picture in the S&P 500 trading range of 2045 to 2119, but things are looking better technically. Don't get too excited if you're a bull until 2119 is gone with force.

Earnings season is upon us. The numbers thus far from those who reported early have been poor at best. Some real slaughters from the likes of Alcoa Inc. (AA) and Bed Bath & Beyond Inc. (BBBY) to name just a few. Very few companies reporting anything positive. The week upcoming is full of critical reports from the leading banks and financial stocks. They better be good because it's hard to imagine them doing well if they miss or warn on future earnings. If the banks don't blast on their reports it's going to be nearly impossible for the S&P 500 to break through 2119 with any force if at all. One wonders if the market is pricing in some of these bad reports because, although many are missing and they're getting punished for doing so, the market is not reacting in total with a large move lower.

Upside surprises would rock this market higher if they came from the right areas of the market. Make no mistake about it, the financial world would be the perfect medicine for the bulls to blast this market up and out over 2119 on the S&P 500. While other areas will be showing their efforts with regards to their earnings over the last quarter, none are more important than those of the financial's. It will be a make or break week in terms of earnings next week. There are many other huge reports to follow after the financial's, but those are the leaders for the S&P 500 and Dow, and they need to come through for the bulls to keep rocking things higher with any force.

With respect to the weekly and monthly charts, I can't say anything positive at all. They are still beyond terrible with negative divergences along with very overbought oscillators. In normal times they would be causing the market great headaches. Fed Yellen, and her actions or threat of her actions, along with global efforts from other Fed Governors, are working in concert to keep the market afloat when it seems impossible. There is no humanly possible way to know how long this can go on, but do yourself a favor and relax with it. Never fight price no matter how inappropriate it may seem. If the S&P 500 blows through 2119 with force, it won't feel right because of the level of froth in some of these stocks but who cares.

Ride the wave until the market says to stop doing so. Don't be inappropriate and just go full in with no regards to risk, but keep some scratch in the gamer for sure. Hopefully the earnings reports coming in next week will give the market a true signal for some further upside, or the end of the move for the bulls. The five-month base is getting old for everyone.

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.

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