The long awaited move towards higher rates still isn't happening any time soon as we heard from our fearless leader, Ms. Yellen, who said that rates will be data dependent. We've heard that line month after month, and what it really means is she's not going to be raising rates any time soon. She doesn't want to spoil the good tidings she has created with her actions over the past several years, which started with fed Bernanke. Keep the ship moving along by keeping rates low enough not to offer any alternatives for folks. So today there were folks out there who thought she would change to a more hawkish stance regarding rates, but they were once again let down by her ruling of "forget about it, it's not happening any time soon" speech. You get the feeling she wants to do it, but you know her hands are tied.

Normalizing rates would be spectacular, but why bother when she doesn't have to. Keep things as they are. Now we get some truth handed to us. The market moved up and down as the announcement came out. It steadily moved higher as the day wore on. Then in the last fifteen minutes it fell back down some, but the S&P 500 and Dow closed higher while the big laggard, the Nasdaq, fell decently for the day. Will the market try once again to make it through 2116, or will it crumble from here? Has the market had enough of trying higher based on this nonsense by the fed, or will it continue to celebrate the no alternative way of playing? I haven't a clue, but, thus far, her actions have led to a market trying to maintain price, and slowly but surely work its way higher. The next few days are critical, so we'll know more soon. Buckle up as things get very interesting from here.

Earnings have been poor this quarter, but if you play the market long enough you begin to recognize that earnings are the least important aspect of whether a market moves higher, even though the majority of folks feel otherwise. Markets don't really move on earnings. They move on current economic conditions as well as future economic conditions, or they move on perception, such as we've seen for many years now. They can also move on whether there are really any other solid alternatives. If you study P/E's and relate them to stock price, it'll become very clear that true earnings have next to nothing to do with market movement. In a bull market bad reports are often forgiven over time.

What falls hard short-term will recover weeks down the road. International Business Machines Corporation (IBM) took almost no time at all, even though they had a horrible report. Others can take a few months, but ultimately they are forgiven. Earnings rarely match the truth of stock-market movement. You need to look much deeper as to what really moves a market. This bull entirely moved by fed actions, not earnings. That has never been more obvious than it is now, but really most of this seven-year bull has been this way. Most bull markets are. So don't waste too much time trying to understand why this market is moving higher in to mostly bad reports. It's not earnings. It's fed action and fed action only. If you use your head, you'll be sorely disappointed. Earnings and stock market prices are rarely in step.

Now we watch two key pivot points on the S&P 500 for further understanding about what's next up for this market short-term to medium-term. If we can close over 2116, we should then make a quick run towards the old high at 2134. If we lose 2070, things can get nasty quite fast for the bulls. So much support comes at that level from gap, horizontal support and trend line. The bears would score a major victory if they can take out 2070. So that's the only game in town. S&P 500 2070 and S&P 500 2116.

We'll know more starting tomorrow. Buckle up. Should be a very interesting ride.

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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