TradeMaster Market Forecast

Although I wouldn't expect much downside pressure to be applied by the bears, the bulls used up a lot of their momentum last week. Today should be a very sideways session.

The market continued its grind higher. And the rally that started November 25 made another new high despite still being in overbought condition.

The market completely reversed direction yesterday and the move was led by the big U.S. banks and large cap technology.

The market declined yesterday and the bears looked a little stronger. Volume wasn't very high, but the bears were able to reverse a very bullish open and also defend 1355 price resistance.

The market was finally able to crawl lower. But another huge surge by the bulls brought most indices back to flat for the day.

So the eight-week rally rolls on and I still remain a skeptic. Maybe not quite as skeptical as New York Knicks fans are of Jeremy Lin, but it's very close.

Only the Nasdaq Index had average volume yesterday. And the "good" volume from the Nasdaq was directly connected to the massive move by Apple (Nasdaq: AAPL).

While it's important to look at the price movement to determine trend strength, many people tend overlook another important factor... And when you have one without the other, it's often a signal to be cautious.

The higher-than-expected CPI number today was attributed to a Chinese holiday, but should inflation in China persist their loose economic policy may also reverse course.

The market showed signs of consolidation yesterday. The lack of important economic news translated into low volume and little price movement on the exchanges.

According to Chris Preston, the Super Bowl winner accurately predicts the movement in the stock market that same year over 81% of the time.

Unlike the broad market, natural gas has had a wild session. Over the past month the price of natural gas has both risen 25% and fallen 33%.

The market has been relentlessly higher for nearly two full months. Such a long rally without a decisive pause always ends in mayhem. Meanwhile, do you think Facebook is over pricing itself?

While I expect a short-term pullback, I'm not anticipating a large top to form this week. It could, but I don't expect it to occur.

With the Kindle Fire lighting up holiday stockings, analysts expect big guidance from management at Amazon (Nasdaq: AMZN) today.

While short-lived, yesterday's pullback had purpose. Along with the sideways fade over the past week most of the major indices were able to work off an overbought condition.

Traders use volume to measure strength. The logic goes that higher volume indicates conviction since more investors are willing to participate.

I continue to think the market needs to retreat by 3-4% briefly, but time is running out for the bears.

Any optimism contained in the Fed statement apparently didn't spread to New York University Professor Nouriel Roubini, who spoke at the World Economic Forum in Davos following the FOMC release.

Federal Reserve Chairman Ben Bernanke has once again managed to penalize responsible savers.