While we'd seen hints of this prior to yesterday morning, Tuesday's intraday action and today's bullishness solidified the idea of the market finding support more often than finding resistance lately. Specifically, the S&P 500 has found a floor at the 50-day moving average line (purple) several times since snapping back to life in mid-April. The bulls have drawn a line in the sand there. The unfortunate flipside is, the S&P 500 has NOT yet been able to punch through its big resistance line around 1897. I gotta be honest though... I still see more bullish momentum than bearish momentum. It's just taking forever for the breakout to build up enough steam to actually put the rally into high gear. There's a good reason why too, which we'll get to in a second. Here's the thing... until the market actually bolts out of a well-developed trading range, there's no amount of analysis we can do that will matter. Like John Monroe mentioned in today's edition of the Elite Opportunity newsletter, the market's going to do what it's going to do, or it's not going to do what it's not going to do. Our job is to maximize the opportunities when they present themselves and not take unrewarding risks if there's not actually any opportunity. In other words, we're still - for the most part - content to be right here on the sidelines, waiting patiently for the S&P 500 to move above 1897, prove it's ready to stay there, and then move on. We're content to remain on the sidelines because the reality is we could still see a major correction unfurl. It would start with the S&P 500 moving under the 50-day moving average line at 1868. And, with the VIX back to its ridiculously low levels again today, the pullback risk is back to uncomfortable levels, although everyone seems to be getting more and more comfortable with a low VIX. With all of that being said... We'll say right off the bat what you're about to see and read is at odds with the semi-bullish slant we just described. We wouldn't be doing you any favors if we didn't tell you the whole story though. The rest of the story is, the market's undertow isn't nearly as healthy as mere sideways movement would imply. We've shown you this chart before so we're not going to dive all the way into its explanation today. We'll just briefly mention for newcomers you can tell a lot about the market's health by looking at how many people are participating in a trend and what kind of conviction those participants have. To take this deeper look at the market's undertow, we like to watch advancer/decliner trends as well as up-volume and down-volume trends. We tend to limit our focus to the NYSE's advancers and decliners and its up and down volume, and we pretty much get the same conclusions we would get were we looking at the marketwide advancer/decline and up/down volume data. Now, the day-to-day-data is still too erratic to use. When we plot the moving averages of this data though, we can see subtle (and sometimes not-so-subtle) shifts in momentum that may not yet be showing up on a chart of a major market index. Thoroughly confused? Don't be. The chart of the data below will make sense when you see it. It's a chart of the S&P 500 with the NYSE advancer trend, decliner trend, up volume trend, and down volume trend. The "trends" are the direction of the moving average lines. In fact, you can pretty much ignore the day-to-bars. The direction of the 20-day moving average lines, or the 20-day trends, are all we really care about. As you can see, the bearish volume trend (DVOL) has already overtaken the bullish volume (UVOL) trend, and with the pace the advancer trend (ADV) is falling while the decliner trend (DECL) is rising, decliners will be stronger than advancers by early next week. Granted, it's been choppy, but if you can look past the chop you can start to see things you wouldn't otherwise notice. In other words, while the S&P 500 itself may look like its hanging on, the bulls are slowly fading away while the bears are increasing in numbers. Something's got to give soon, and the easiest way for anything to "give" at this point is a marketwide pullback. The only problem I see with this analysis is we saw something similarly concerning in March, but nothing ever came of it. I've watched this chart every day for years though, and more often than not the clues mean something when they start to appear. [We'll have a follow-up on the whole thing later in the week so we can better explain.] So how can we rectify deteriorating breadth (advancers versus decliners) and depth (up and down volume) with an index that looks like it's working hard to remain bullish, or at least remain in position to stage a bullish breakout? That's just it - we can't. This is why we're going to continue watching everything as long as nothing seems capable of snapping stocks out of this rut. That's all we can say today... too much other stuff to get to. Look for an updated breadth and depth chart soon though. If the bulls are going to make a move and sidestep a correction, it's going to have to happen in the very near future. Even Better Than First Expected For those of you who waded into our Staffing 360 Solutions (STAF) idea from Tuesday morning's newsletter (or those of you who at least became interested in it), there's a late-breaking update. I mean, it literally popped up a few seconds before I was going to send the newsletter, so I had to do some quick editing at the last minute. It was worth it though. The bottom line is, forget the revenue-growth projections we had for you on Tuesday morning; they're already obsolete. With yesterday's announced acquisition of PeopleSERVE, the sales projections through the end of the year were ramped up. Now instead of an expected top line of $22.6 million for the current quarter, $25.7 million for next quarter, and $27.6 million for the quarter ending in November, those numbers are (respectively) $24.1 million, $30.2 million, and $32.1 million. Nice. I don't know if the raised sales outlook is entirely from the purchase of PeopleSERVE. I do know, however, Staffing 360 Solutions plans to add about 15 more acquisitions within the next couple of years to the five purchases it's made over the past twelve months. Point being, this isn't apt to be the last time we see the sales projection grow. We haven't even seen the bulk of the projected increases yet. This company is still gunning for annual sales of $300 million within a couple of years, and the annualized run-rate is already on pace to be more than $120 million by the last quarter of the year. Speaking of Staffing 360 Solutions' acquisition of PeopleSERVE, if you want to know more about it or about STAF in general, the company's going to be hosting a conference call on Friday, the 23rd. Here's the info on how to participate. Get a Grip on Upcoming Big Changes Last but least, I don't know how many of you also get the SmallCap Network Elite Opportunity newsletter, but if you're not getting it, you should. I've said numerous times how the key to successful investing is being able to distinguish between long-term and short-term data, and being able to apply this data appropriately to your short-term and long-term trades. Most investors - even the ones who claim to solely be in this game for the long haul - generally only have a short-term mentality. This makes it tough to do as well as one would like to do with stocks. Yeah, well, the SCN EO newsletter today was a real eye-opener for me, and a nice reminder if you don't get a good grip on the bigger picture then it doesn't really matter how good of a grip you have on the near-term - you're always going to be chasing the trend-of-the-day, rarely getting into any of them in time. More specifically, John Monroe made a key point today about how the whole bull market is slowing down and the next (probably) two to three years isn't going to look like the last three years. What mattered then won't matter as much in the future, and vice versa. I don't want to give too much away, but like John explained in today's edition of the EO, earnings growth and net profit margins have been the data investors have latched onto up until this point. Beginning with the current quarter, however, earnings growth and margins are likely to take a back seat to two other pieces of criteria now that we're in the more mature phase of an economic expansion. We can't tell you what those other two criteria are; it wouldn't be fair to the SCN EO members. I will tell you, however, you can find out what just changed about the bull market by signing up for a free two-week trial to the Elite Opportunity newsletter. Like I said, Monroe made a great point today about the bigger picture I've not heard anyone else come close to making, convincing me once again he's got a better handle on things than anyone else I've seen in a long time. Here's how to get your free trial, or cut and paste this link: https://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/