The market is sitting pretty much on the 50-day exponential moving average on the S&P 500. It will be very important for the short-term to see if we can break back above, or whether these 50's cause the next move lower. The answer to that may come, to some degree, tomorrow morning when the new Fed President, Ms. Yellen, gives her first speech to Congress. The world wants to know her future stance on tapering, and on those extremely low rates in the short- and long-term worlds. Once she finishes her speech the grilling will begin. You get the feeling Congress won't have much mercy.

The questions will be tough, and she'll have to prove she's up to the task. I'm sure she'll do fine. However, the market wants answers. If the economy continues to weaken will she taper the taper? Will she taper no matter what happens with the economy? Will she keep rates low, near zero, and for how long? What would change her mind? This will be very interesting banter and we should all listen in, so we can get a true feeling of what we can expect of her in the years to come. Bernanke is no more, and thus, the market wants to know if she'll follow his process in place. So expect the fireworks to come fast and furious tomorrow. It won't be a boring day, even if it's a bad one for the bulls. Stay tuned as things are about to heat up in a big way.

The bull-bear spread has come down quite a bit. Not as much as we may ultimately need, but the chance of a rally higher does exist in the very short term. On the SPY, that would be gap bottom at 181.66, if this market breaks out above S&P 500 1797 with force. With the spread at 28.5% heading in to this week, after being as high as 46%, you have to think a move higher is possible, but by no means does it have to take place. It would fool the masses though as many are thinking we can't break above the 50-day exponential moving average here on the S&P 500.

A move above would really keep folks guessing about what's really taking place here and we know that the market loves to do that to the masses. It gets a big laugh out of the way we're all trying to figure it all out. It laughs at our emotions as the market swings about every single day. So a break above the 50's would really create havoc with just about everyone. This will only happen if Yellen says all the right things. So we have to wait and see.

181.66 is key resistance on the SPY. On the S&P 500, watching 1775 gap support. Those are numbers to watch that, if broken, can create a more directional move. Until then it's noise. Lots of noise in this game, and that's what creates all the emotion as we swing about. Keep things light, but being involved is not a bad thing. If we fall on Yellen's words early tomorrow it'll be interesting to see if we can recover late. Again, tomorrow will be very interesting.

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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