So what more can I really add. I can stop this letter right here by simply stating we're in a bull market that still has concerns with regards to sentiment to some degree. Not as bad as one month ago, but still concerns. Ok, letter over. Anything I add from here isn't going to be earth shattering. The market continues to defy logic from a fundamental perspective. Yes, we're still in Disneyland. The worse off the economy is the better it is for the stock market. A not so great economy equals the continuation of lower rates. Lower rates equal a bull market.

Only when we have a full recovery in the economy can the bear market start once again. At that point, euphoria and the rising of rates, will annihilate the stock market, but until that time arrives, and that's still a way's off, the bull will continue overall with plenty of pullbacks along the way. With sentiment surely on the rise this week, we may need a cooling off, fear period once again fairly soon, but make no mistake about where we are and will be for a while to come. The bull lives with lots of bumps along the way.

Yesterday was a very important day for this market. The bears created a large, eleven-point handle gap down in the S&P 500. This is normally a bad sign that things will worsen. The size of that gap tells that tale. Not this time however. The bulls came roaring back. The markets turned green while the bears turned red. They lost their big opportunity. Today they tried again with another small gap down, but that too didn't work. Lost opportunities has been the name of the game for the bears for a while now. It has to be very frustrating for them while also creating a no fear attitude for the bulls. Not what the bears need.

They needed that big gap down yesterday to be the killer. It just didn't happen. Today we followed through upward, and that leaves the bears wondering what they can possibly do to gain any real, sustainable momentum. Technical days, such as what occurred yesterday, shouldn't be taken lightly. It just adds more technical strength to the bulls, who already have plenty with multiple gap ups in place. Add the fact that they have taken back lost key-moving averages, the outlook isn't too wonderful for those bears. Anything can happen at any time in this game, but for now, the bulls remain firmly in control.

So where aren't the bulls in control? Only from the fact that they are dealing with a sudden surge in complacency most likely this week, and the fact that we're still overbought on the short-term time frame and some of the very long-term time frames. It can stay that way, but that's all the bulls have going against them. It may seem like a lot but it really isn't. Sentiment isn't too out of control quite yet and overbought can stay that way longer than most would think possible. The one thing that really matters, rates, will remain where the bulls want them for a very long time and that is likely to keep things on their side overall for a while longer. Only when the bears can eradicate 1799 on the S&P 500 on a closing basis do they have anything to feel better about.

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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