It took fifteen years to make the round trip from 5000 plus down to 1100 back to 5000 on the Nasdaq. Most thought we'd never get back to that lofty level of 5000 after looking in to the eyes of 1100. The average trader, and especially the long-term holder, was devastated. All hope was lost for the most part by the majority of people. I don't think there's anyone reading this letter that thought the bubble that had burst would get back to a bubble again. But here we are. The glory of the froth bubble is back with us, but under different circumstances. Ms Yellen, and the rest of her global gang members, are protecting their markets through liquidity and rates, thus, it's very complicated when determining from what level this puppy will finally crash from. It will crash out some day, but to this point in time there are still no classic signs of that happening. I will discuss that in a bit.

Today saw a move to 5000 on the Nasdaq after just failing there a week, or so, back. A small pullback and off we go. How high will this run? No one knows for sure, but a run at the old highs of 5132 can't be ruled out. Higher than that can't be ruled out either. So yes, froth is off the charts. But we have learned that the actions of the Fed are far greater to the overall behavior of our stock market than froth will likely ever be. We don't have to understand why. All we can do is behave according to the markets price action. You can't play emotionally. You won't survive. Play what you see and never what you think.

We watch all the time with regards to when this market will finally enter a bear. That does not include the action that could occur which isn't a bear, but will feel like a bear. A correction or a strong pullback is nothing like a bear. The behavior is very different from which they start. A correction will likely show no signs it's about to begin. A bear will. How? I'll explain. Turning the ship as they say takes a long time with a bear. For the most part, it's not instantaneous. Big money sells at tops. High volume moves lower. Shortly after you see strong moves back up to test that sell off. Back testing, if you will, but the key is much lower volume created by retail buying only for the most part. You then see the move back down again on higher volume.

This process usually occurs at least three times. It can be more. High volume down by big money. Low volume back up by retail. Finally retail gives up after getting frustrated repeatedly, and the bear gets going. Bull markets usually form massive negative daily divergences as well, but how it falls and rises before giving it up completely was just explained. Corrections don't rally back as hard, and the selling off the top is not accompanied by the very high volume. Big money is not interested in killing things bigger picture. Just trying to cause a pause in the action. They don't sell as much as they simply stop buying. They don't create the intense selling pressure. Things just move down more gradually. We haven't seen either take place yet, but for now, there is clearly no signs of the bear, although anything can change on the fly. Nothing yet.

Some things are not changing. Rotation remains the game for the most part. What fails one week is fine the next week. While it sells money rotated around to other sectors, such as we saw today in the world of semiconductors. A buying by NXP Semiconductors NV (NXPI) sent those stocks flying higher. The whole sector participated. This story of rotation will have to change if the bears are to get any satisfaction. Great stocks such as Apple Inc. (AAPL) are simply overbought and are pausing, but nothing bad in terms of bearish behavior. It had its run for now, thus, it's rotation time into something else. Not out of the market altogether. Just rotating about. The market not needing the best to perform all the time to get the results higher for which it seems to be striving.

Sorry, if you've been bearish. Not easy. The market hasn't been great this year, but it is a bit higher. Every time the bears get some love it's pulled away very quickly. Stay with what's working. The long side is the best side, until we see the type of action that says the party is over. Stick with the best companies. Play what you see. Recognize risk remains high, but avoiding the short side is still best overall.

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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