That's not necessarily good news as it's the second move back above 70 RSI on all the major index daily charts. It would have been, and would still be, a good thing if we sold harder in order to fully unwind those nasty overbought momentum oscillators. but for the moment, the bulls refuse to give in. The RSI's, all back over 70, with the Nasdaq heading towards 80, where it fell hard last time. The risk for new plays doing well is poor here, even if we stay overbought a bit longer. You have to be very nimble, if you're going to put new money to work here. At any moment in time, the market could snap lower.

We started out higher, once againtoday, based on news out of Greece, where the final plans were put into place, meaning a lot of very unhappy citizens as massive austerity is now the game plan. Without it, Greece would fold over and go belly up. No choice, but that's what the market wanted -- a hard-line stance by its Government. Mission accomplished. So, we closed higher, once again, as we grind our way up into very overbought conditions. We need to see a true reversal stick, before we can say the move is over, thus, for now, we may try to go higher, still, to my hoped for target of 1370 on the S&P 500. May not get there.

When you're in a more bullish phase of the market, such as we are in now, you want to see a reversal stick that says the move is over. That usually occurs on a gap up that fails as the day moves along on increasing volume to some degree. It tells you, the sellers have finally caught up to the buyers. A massive black candle, or worse yet, a red candle, once the gap up has taken place at the open. It shows true exhaustion. The complacency is here to some degree as the market is getting bought up on all dips, which shows a real desire to just get me in. Folks want in who have missed the run.

Those who were bearish, or on the fence, can no longer handle the upside happening without them, so they're the ones now holding up the market. That will stop at some point, and those who are the last in will be the ones who take the hit. The market will need more despair in time, so now we wait for the right down stick. Not just any down stick, of course. Just because we have a down day does not mean the market is done trying to go higher. It needs to be a gap up reversal that fails hard on bigger volume. That will most likely be the ticket to tell us the market is ready for some deeper selling to unwind those very, overbought conditions.

There are many different sites that give out information regarding levels of complacency. You can see it somewhat in just looking at those daily oscillators, and how overbought they get, but you can also use various different sites to fill you in on just how high the levels of complacency are. The bull-bears spread I use for Schaefer's, tells us that two weeks ago we rose a full 4% in the spread. When we get the numbers this week, it'll probably be up another 3-4%, making that roughly 8% in just two weeks.

The numbers are ramping up fast. You don't want to see the numbers rise too fast as it shows fear is leaving, and when fear leaves, markets snap down. It can be a temporary snap-down that only causes a 5-85 pullback, but you don't want to be in the market too deeply when that takes place. At least not into that many plays. Nowhere near 100% involved, hopefully. The complacency is definitely ramping up rather quickly, thus, you know a hard selling episode will take place, but again, you want to see the right reversal stick at the top. Just be aware that emotions are getting a bit euphoric here, and that will have to be taken down with some disappointing action at some point fairly soon.

We all know by now that the S&P 500 has massive support very close together. 1326 is the 20-day exponential moving average, with 1315 the long- term down-trend line breakout level. Strong support, less than one percent apart, is good for the bulls. Below 1315 is not good, but there is strong support horizontally at 1292, and that is joined by the 50-day exponential moving average at 1293. Two areas of massive support only one-point apart.

Losing 1315 is bad. Losing 1292 is a disaster for the bulls. Losing the down-trend line, along with the 20- and 50-day exponential moving averages, would be a bears dream. In a very healthy environment, the market should be able to hold on to 1315. We shall see when the selling finally kicks in. For now, we use good weakness to buy again. The bull should have a ways to go, but the short term is going to be far more difficult for sustainable upside action.

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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