And why not. A friendly Fed sure goes a long way to keeping the bears away from getting too aggressive. You can see how fast they are to cover on any market selling let alone not taking too many new short positions. They know they're fighting an uphill battle, and, seemingly, would rather step aside for now. This does not mean we shoot straight up. Things are getting a bit complacent, more on that later, and that alone over time can cause a strong selling episode for the entire market.

The market tried numerous times to sell off today, but simply could not find the sellers. In fact, many funds are chasing performance. Many had stayed away from the recent rally due to fear of why the market was moving higher. Now they are using pullbacks, even shallow ones, to position themselves long. That makes it tough to get a market to want to sell with any force or sustainability. Just keep in mind, we are still overbought on those daily index charts, thus, take the time to exercise caution on your playing. Exposure is necessary, but don't go overboard.

We are definitely headed to the land of complacency. The bull-bear spread is now up to 29.7%. That's not a great number for the bulls to have to deal with. It shows you too many folks are beginning to think the market can no longer fall with any force, and that's not what you want to see if you're a bull. The trade is starting to get full. It doesn't mean we can't continue to go higher because we're still not at the bigger red flag reading of plus 35%. We can get even higher than that. In the biggest of bubbles we've gone over 40% more bulls to bears, but 35% is not a healthy number for the bulls, thus, 29.7% is a warning, but we're not quite there yet. Something to keep an eye on as the days and weeks move along. When the market snaps from too much complacency, the move lower can be quite severe and very rapid. Just a heads up.

Let's talk a few moments about oil in what had to be the strangest day when comparing oil with the S&P 500 I've seen in years. When oil gets slaughtered, and make no mistake about it, oil got slaughtered today, the market usually follows along that trade. The market held up perfectly today, and that technically is a huge divergence that makes no sense. Some talked about political manipulation.

Some spoke about QE3 not being what many hope it will be since QE1 and QE2 didn't work to stimulate the economy. I don't know personally what it was, but the oil trade fooled the masses, which, of course, makes perfect market sense. It needs to be watched closely. Is oil portending a market fall to come since we're so overbought and getting complacent? Caution is the word thanks to the oil trade today. It just doesn't make any sense. If the market does pull back, the S&P 500 has decent support at 1452, which is the 50-day exponential moving average on the short-term 60-minute chart. If that breaks, 1425-1435 is the confluence of support where the market broke out of its base. That level should hold any selling to come short-term.

Just proceed with caution short-term here. Some exposure is fine, but the market would be better served if it fell some to unwind more deeply, which would take the risk out of new longs to come.

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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