A very interesting evening last night. We had two pieces of news that can only be understood as scary. The world bank came out and said they are cutting global-growth numbers based on poor demand and commodity prices. Horrific news, only to have China chime in with additional news. The Central Bank of China said their economy is in pain, and unfortunately there is further pain to deal with. No real hope as far as they can see. Folks, this is exactly the type of news that ends any up trend. In fact, it's the type of news that should absolutely hammer the market lower.

A crash would be an acceptable reaction. No one would argue. If the numbers are bad, and getting worse, and we're dealing with historic levels of P/E's on the S&P 500, then it should be expected that we'd run lower all day after a nasty gap down. Not a little gap down of 10-15 points, but a 50-point gap down on the S&P 500 would more than make sense. Maybe finish the day down nearly 100 points on the S&P 500, 200 on the Nasdaq and 1K on the Dow. We gap up instead, and challenge the next level of resistance at S&P 500 2116 all day, and close slightly above. 2134 is next up, or the old, all-time high print from 2015. All this bad news and we're about to challenge, and probably in time exceed the all-time highs.

Even the bulls have to wonder how that's possible. Rates are clearly a reason, but I think it's beyond that. More on that later. The market seems to want a breakout at any cost and looks ready to do so, even though we're dealing with all the boring problems I've discussed for months from negative divergences to high P/E's to faltering global economies. Lots more in between. Never fight what you see, thus we stay long, but don't get overly complacent. Now the bulls focus on clearing 2116, with a bit more force, and then make a run to the old highs. Seems impossible, but it's not. I have to say I don't get it but I don't need to and neither do you. Follow the charts. Price and oscillators. End of story.

When a market acts out of control you ask yourself not only why but how. Why is because it's an election year and the fed doesn't want to make any major changes that would disrupt what's already in place. To make changes that would hurt the average person would be to possibly upset the party that put her in office. This alone is enough reason to keep rates low. The how is more interesting. I wonder if the fed is buying stocks in large quantities and holding those positions at all costs. Something is going on we don't understand. Last night's news simply had to nail this market with a big gap down. It didn't budge lower.

Something is in control of the market and what it is isn't clear on the surface, but it doesn't take too much imagination to figure it out, at least on some level. I think the fed is involved, but not quite 100% sure how. Even GS came out today saying the market should fall 20%. Goldman Sachs (GS) ignored? Hard to believe so you have to wonder. I believe every bull wonders as well. Even they have to be amazed that we didn't collapse out today. Something smells bad but we may never know what it is. My hope is years from now we get clarity. Bottom line is the market is acting inappropriately to outside factors. Something, or should I say someone, is making sure this market doesn't fall.

2134 is the last line of resistance for the bulls. If they can penetrate through, then it's lights out for the bears. Blue sky follows. The market will make up its own new resistance levels. The charts are set up to make the move, but nothing is guaranteed. Looks likely, but see it before responding to it. Maybe we break out, but it'll be a false breakout. Time will tell. Stay long, but respect the nonsense taking place that's out of line with reality.

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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