The stock market has been hoping for an agreement between both sides for quite some time. It began to look quite dismal for the prospects of getting something done. Neither side really seemed interested in doing what was right for the public but isn't that always the case. They probably still don't truly care, but there is an image and reputations at stake here, so it appears a program of some real substance will get done, one that actually includes both sides giving in some. Seems almost impossible to believe, but there is real hope that things will get done and done in a way where the public actually thinks it's not half bad. Never say there aren't any miracles. You are possibly witnessing one at this moment in time. If we get exactly what we need we should see higher prices in the stock market overall. Not straight up. Lots of head fakes up and down but overall higher. Let's see what we get over the next 24 hours and how the market responds to it.

The market opened on Monday a bit lower, but quickly gathered a head of steam as news came out that things were progressing along. Once Obama spoke at 1:30 PM ET, the market blasted off once again. He wasn't exactly super optimistic while saying that things were moving along but that no deal had yet been struck by the two sides. At first the market started pulling back, but shortly thereafter, it started gaining steam and by the time the day ended, there was nothing, but green across the board, closing right at the highs. Very solid action as the market is sensing a good agreement both sides can feel good about. Solid action that shows the market isn't dead and gone just because we have struggled for the past week or so. The bulls can feel good about today's action. Nothing to get excited about, but clearly good action for the bulls.

Let's take a moment to go over things regarding the overall health of the market. You need to ask yourself a few questions. Also, you need to look at the backdrop regarding interest rates. First of all, at this time we see no distribution volume off tops. That's key. Big money is not selling off high readings. Good news is still treated as good news, and sentiment is not even close to being a problem. In addition, there may be something more importantly to realize.

Mr. Bernanke is intentionally keeping interest rates near zero so as to keep people from running out of the market. With rates this low folks have nowhere else to go with their dollars. This alone is helping to protect the stock market from falling apart. Even if rates started to go up from here it would be a very slow and gradual process. Rates would still be too low for folks to start running out of equities and into the safety of those rates. Until rates start going up much more than where they are now, folks will likely stay with stocks over anything else. The market may not always be friendly with the news that's out there, but Fed Bernanke is working on forcing folks to hang in there. He's doing a good job from that perspective.

The market will likely continue the whipsaw that's been occurring and making life difficult for traders, but I think we can still have some small exposure, just nothing too heavy. Buying oversold is best but not the only way. I would not be shorting until we get a sell signal in the overall bigger-picture market. That doesn't exist in this moment. It can happen quickly and suddenly, but right now the market remains on a buy signal which really exists until we see sub 1350 on the S&P 500 or the long-term up-trend line.

Peace and Happy New Year!

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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