The short and medium term momentum of the market is still in bullish mode, there is no way for swing traders to short this market successfully until the major support of 1080 or 1030 is broken

The S&P 500 Index rested on its 10-day trendline as an intraday springboard, erasing an early deficit to finish 5.3 points, closed at 1218.71.

As I said on last post that the S&P 500 will test the 10 days moving average at 1200. Today's low is at current 10 days moving average 1204, a reversal that takes the S&P through its major support at 1200. you should cover your short today at 1204 which started two days ago.

Some of you may use this pullback as the buying opportunity that you had hoped for. The favorite groups are still technology and precious metals stocks. But manufacturing and solid dividend-paying blue chips should also be on the list for buyers of quality issue. I suspect stocks will stay in a range, largely directionless, leading into the weekend

The Fed did QE1 and there was no tangible results, so now they are doing QE2 which seems to be an act of desperation, because they wouldn't be doing it unless the reality was more negative than we are aware of after the QE1. The Fed continues to manipulate the equity market higher, push the USD down, which in turn sends stocks and commodities sharply higher. The market is extremely extended, but it can remain that way longer than most of the investors think.

The majority of investors appears to be in almost total denial mode about the economic depression start from 2008. They seems to believe that this market has already found the bottom, so it will be a tough road the next two years, I expect another significant down market cycle starting sometime in 2011. However, the short and medium term momentum of the market is still in bullish mode. Most of the short term investors are still riding this bull-express train. There is no way for swing traders to short this market successfully until the major support of 1080 or 1030 is broken.