And why not. Just when it looked really bad, with another test of 2020 on the S&P 500 looming, the bulls took an oversold, sixty-minute, index-charts scenario and turned it into their own little rally party. It was quite a good rally as well. Much stronger than anyone should have expected, considering the nature of the selling the past couple of days. The oscillators looked bad, along with price losing major exponential moving averages. The market was set up for further losses. Not to be whatsoever. The bulls had a decent Jobs Report, which allowed the futures to move way up. However, just before the market opened most of those gains were wiped out. Now, with the sixty-minute charts in the low 20's on RSI, it was clear we'd rally some to unwind, even though all the pre-market gains were gone for the most part.

No one could see an explosion upward coming again, especially because all of the gains were wiped out just before the open. A small up-day to unwind seemed to be the best the bulls could hope for, but that just wasn't meant to be. The gains held and allowed the market to, once again, be a complete mystery. The upside gets squashed any time we get near 2100, but it also holds well on moves lower as it approached the 2020 area. Neither side is able to take control, but as long as we're above 2020 there is nothing for the bears to be happy about. The bulls are somewhat frustrated in their inability to take this up to the last high at 2116 on the S&P 500, but at least the onus is on the bears to take away the trend in place. The bulls know this and seem to be able to hold the line at will when it becomes a necessity. The bulls still have the ball in their court overall. Not a slam dunk, but it's their ball.

The global fed Governor's continue to try to weave their easy money story to the masses and there is no argument that it is working here better than anywhere else. Many of the other markets around the world are in a far deeper struggle than our market. The concept, notice I didn't say real results, of free cash to the banks as being a major positive is still holding things up for the bulls. The way our economic reports are coming in, especially on the manufacturing side, tell us that the reality is not there for the real world. The numbers continue to fall off quickly. Even the services side took at 4% hit on the number this week from 59's to the 55's. The manufacturing level is now contracting below 50, and well below at that.

The fantasy of things happening has allowed our market to hold up unreasonably well. If you're a bull and you've been playing the long side, you don't care. We've all benefited from that. Not caring has allowed us to play long when we really shouldn't have been because we knew the froth was there and things would likely move higher. If we played with our minds, we would have been shorting and getting crushed a long time ago. The music and the fantasy will cease someday, but there are still no signs of that occurring any time soon as we have yet to see any distribution volume off of any previous tops. It doesn't have to happen that way, but we also haven't seen the type of one-day, heavy-volume, massive, gap downs either that can signal a longer-term top is in. Play what you see and not what you think or hope. For now, the fantasy lives on. Viva la fantasy. Or maybe for a while longer we hope.

In the end, the numbers matter. What comes first will make all the difference. S&P 500 2020 is the line in the sand for the bulls. 2116 initially is the line in the sand for the bears. No way to know which will come first. Both are some time away from current price, Many cases can be made for a breakdown but, the most obvious one is the bubble created by the Fed. It can pop at any moment. Let's not forget those horrendous monthly charts across the board on the indexes. The bulls can claim their own case. It goes like this. The fed. The fed. The fed. The fed. Ok, you get it. The fed. The leader of the known market universe. If we go with truth, the bears will win out. How often does that happen? Well, look at the price of Amazon.com Inc. (AMZN) and you have your answer. So we shall see if those monthly charts ever truly kick in, or whether the Fed is so powerful that they get delayed further out in to 2016. Nothing is easy in this environment for sure. Don't over play your hand.

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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