It's hard to be bearish right now, especially with the market continuing to press higher in the face of multiple negative indicators. Many analysts will point to the persistent bid beneath the market and declare it a sign of strength. After all, if stocks can rally despite the negativity, there must be an underlying bullish current.

Experienced traders see it differently.

The stock market's job is to separate the public from its money. So it will do whatever it takes to keep as many people as possible on the wrong side before making a key reversal.

Yes, that's a cynical view. But having been involved in the market for the past 25 years and having seen how few public investors ever make any money in stocks, a little cynicism is justified.

Think about what happened in late February and early March. The stock market was violently oversold. Many technical indicators were starting to display bullish characteristics. And I cautioned we might have been on the verge of a major rally.

But stocks kept falling. Every brief rally attempt was hit with massive selling pressure and stocks could not catch a bid. The public sold stocks en masse and ran up the largest cumulative short position in history.

We all know what happened next.

Today, we have the exact opposite situation. Stocks are violently overbought. Most technical indicators are bearish. And it looks to me like stocks may be poised for a massive drop.

Yet the market keeps rallying. Every attempt to sell off is met with persistent buying pressure. The public is desperate to buy into every dip out of fear of missing the next big move higher.

Yesterday's heroic eight-minute rally (from 3:15 p.m. Eastern time to 3:23 p.m. Eastern time) erased a 100-point decline and pushed the Dow up 50 points. This is just the market's latest attempt to suck in the public investor and shake traders out of short positions before a more sustained decline takes hold.

Of course, I know how paranoid that sounds. But I've seen this movie before and the ending is always the same.

The weight of the negative technical indicators may eventually press the market lower. There's no way to tell, though, from what level the selling will start and what the catalyst will be for such a move.

Yesterday's gap-down opening had the potential to kick off a sharp decline. But the bank stocks were showing strength. That strength led to a late-day reversal for the major averages.

There's absolutely no way I can recommend buying stocks here. Not with the multiple bearish indicators I've pointed to over the past few weeks.

At the same time, however, I don't want to get too aggressive on the short side until we finally see weakness set in and hold. A move below 923 on the S&P 500 should do it.

Best regards and good trading,
Jeff Clark
Growth Stock Wire

Editor's note: Veteran trader Jeff Clark is author of Growth Stock Wire, a daily read providing investors with a pre-market briefing on opportunities in the global stock, currency, and commodity markets. Click here for more information… and a free report on the best ways to trade options.

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