Nothing has changed. After trading sideways for three weeks and refusing to really fall with any force, the market heated back up this week with some decent gains, basically across the board. The bulls were bored not having gains for a few weeks, thus, they decided it was time, once again, to get moving, since the bears were unable to do anything of significance for that period of time prior. No great blow up and out, but there was one very strong day this week, which also included your typical grind higher most of the other days. Classic bull-market action for sure. Spend some time calming things down a bit, and then rock things up again once oscillators unwound some on the key daily-index charts.

Wash, rinse, and repeat is the name of the game for now. The bears are looking for something special, but they're just not finding it. As the week came to a close, it was the same-old for both sides as the bulls ended the week smiling a lot more than they were when the week began. Sure, the same problems exist, such as complacency, and now, once again, overbought oscillators. But that hasn't stopped the process in place from coming to any conclusion at this point in time. It is what it is even if you think it's inappropriate. Stay with the trend, until we get those outside sticks on the key weekly charts. The bulls remain in control.

As if we don't have enough headaches to worry about, with regards to sentiment, we also now have to deal with some potential nasty-negative divergences setting up on some major index-daily charts. It's not that bad on the Dow and S&P 500, but it's there potentially. However, the Nasdaq small-cap and mid-cap stocks do have potential for strong-negative divergences to kick in. The Nasdaq and the iShares Russell 2000 Index (IWM) look awful technically with regards to those divergences. That said, over time those divergences can get wiped out, but you have to be on guard, because they're there for the moment. You need to respect them.

There are so many reasons to disregard anything that looks bad because of how strong this market has been, even in the face of bad news. Just today, we saw a nice gain in Goldman Sachs Inc. (GS), and others in the sector after being downgraded. That said, you never turn your back on something that has historically had a negative effect on the market. The negative divergences are real. The sentiment problem is real. They deserve the respect that can come from having either one of these take hold, let alone both of them. For now, neither one is kicking in. They're both out though. Give them their due respect.

The market is such that we all should have some scratch in the game here. That can't be denied. It has worked out having done just that, but again, I would advise all of you to sit back for a moment and reflect on how fast things can turn in this game when some outside negatives take hold. Sentiment, negative divergences, and plain old complacency, is alive. It means maybe you don't want to be all in here, but, of course, you should do what you think is best here. Some conservative responses would seem to be the right thing to do. 1730 remains long-term support.

Have a great weekend!

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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