The fed minutes came out today and they weren't pretty, if you're a believer in the global economic recovery theme. Ms Yellen said the committee felt that there were still strong risks to the global economy, and, thus, the unspoken words were that there won't be any further rate cuts for a while. Financial stocks hated this and moved lower, which temporarily hurt the action in the overall market. Nothing terrible, but that sector took a big hit on the news. When the financial stocks are struggling, it's a lot harder for the market to move up simply because of the heavy weighting in those stocks. If Yellen had hinted anything about a global future recovery, they would have exploded.

Didn't happen. Further evidence of how the fed can hold the market up with low rates, since this type of news should have been met, in the real world, with a total market meltdown. Market fell, but then went back up. Bad news? What, us worry? No. We have the fed and her bag of goodies. No worries. Disneyland is still upon us, even though we'd be better served with lower prices to unwind. The market just isn't interested in the big spill. Not yet, and who knows when. The fed warning is more about the world away from the United States, but if there's enough bad news abroad, over time it has to catch up to us in terms of importing of goods, and, of course, the exporting of goods. Demand and supply will be affected. Fewer workers to build quality goods and less demand, of course, as economies weaken. None of this hit the market today, but it's out there.

Today was interesting. We gapped up this morning after some terrible action yesterday. The gap was nothing to get excited about as it was small, but the momentum started to build as the day went along. The bulls were carrying the market higher with most sectors participating in the good tidings. Only when the fed minutes came out did the momentum stop to some degree. Then it recovered again. The low-rate environment, in the end, is what's holding this market up regardless of the news that comes out. Today was proof with the fed, so how do you play? You buy when anything you want to own gets unwound from overbought conditions.

It's as simple as that. They won't all work as evidenced by the financial plays, but that's the best way to go about things. Buying when overbought can work, but the odds are against you. No excuses can be had from the bears today. They got the news they wanted from the fed minutes, but simply could not hold the bulls back from buying the initial selling, which was pretty solid. The bears were looking good, but it didn't play out that way. We're still in an overall bull market, but we're also still in an overall lateral period that's been ongoing for nearly eighteen months. Both sides look like winners, but neither side comes out on top in the end. Simply lateral. Today's action was solid, even with the bad news for the financial stocks. Have to love that if you're a bull. Even the money stocks couldn't help the bear cause.

We all know about those nasty monthly charts, but the market is acting as if it someday soon would like to test the old highs and see if the bears can use those monthly charts against the bulls. The divergences are so bad it's off the charts, but who knows, maybe this new market will fight through them. I'd bet against it, but you never know. 2134 is the level. If we get there you respect the effort by the bulls, but you also must respect those nasty divergences. You stick with the long side trade until it stops working, meaning a nasty gap down that keeps running lower, and is then followed through with another big down day immediately, thereafter.

Getting the first day down has come around a few times, but getting the big follow-through really hasn't occurred, so that's what we'd be looking for right now. 2075/2080 is next big resistance. Then 2104, 2116, and finally 2134. Support down from 2031 to slightly below 2000.

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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