For fourteen of the past fifteen days the S&P 500 has been trading between the 20- and 200-day exponential moving averages. Neither side has been able to take control. Boring beyond words. Day after day we move basically nowhere. The volatility is gone for now. I have no idea what catalyst will come along to allow for a breakout, but you don't know if you can even trust when the move occurs. The 20-day is at 2059. The 200-day is at 2024. When one breaks we should expect a directional move. It should, but who knows for sure. This market has opposing forces working. The bulls have the Yellen. Low rates are here to stay. Yes, we'll see a rate hike in June, but she won't be promising anything aggressive after that as the global economic environment is not good. Rates will still be very low after the June hike, so big money won't likely be running out.

If Yellen promised rapid hikes, one after the other, then the market would simply crash out, but there's no chance that will occur. So we deal with an uncertain market day after day, but since the spread is only 1.5% the market will be forced to make a move soon, and trust me folks, it could go either way. No new catalyst is at hand, although it's amazing how one shows up when it needs to. The daily charts are slightly more favorable than not, so the onus remains on the bears to take away the bullish trend. MACD's have unwound to zero, or below with stochastic's, and RSI's all in fine shape. Of course, that guarantee's nothing as the wrong news can take away the good vibes on those oscillators. Bottom line is for the short-term the focus is on S&P 500 2024 and 2059. Hopefully, the powers that be will show some mercy and allow the market to finally make a move. It can't happen soon enough for this writer.

One thing that can't be argued is that the market has handled every drop of bad news out there without blinking. Negative divergences are still there on the monthly index charts. Declining economic activity is still part of the global picture. The S&P 500 is trading near a 24 P/E, while earnings decline. Impossible to sustain one would think. Yellen is telling us that we have the rate increase coming in June. Nothing has hurt this market. I don't understand it, to be honest, but the bulls are still in overall control. Other than something very unexpected there is nothing else this market should have to deal with short-term that would be considered bad news.

If something positive were to come out of the blue, such as next month's ISM Manufacturing Report, then this market would have a positive catalyst to help it out. We'll get that report right after we come back from the Memorial day holiday next Monday. It doesn't have to be anything amazing. You get the feeling that since the market is hanging in so well, it would only have to be a drop of good news to get the bulls screaming for more upside action. We take it day to day, hoping for a move above 2059 or below 2024, but until it does it's your job not to get overly involved. Anything you play you should consider high risk. Keep stops tight, folks.

One last thing before I go. In markets, such as these, the tendency is to get bored, and, thus, annoyed with the action. This often causes folks to play more than they should. When there isn't much going on and you're staring at the screen, you want the action, and that's dangerous. Don't be that person. Keep it light, and do something else with your time, until the market breaks one way or the other at the levels mentioned above. It is a very boring market. Don't let that cause you problems unnecessarily.

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.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.