The March S&P futures contract has closed higher in 10 of the last 14 trading sessions. The four "losers" have been under three handles and did nothing but lure in a few more short traders only to see them cover (buy back) contracts to force price higher.

A nearly unheard of reading in the Philly Fed index didn't trigger an immediate rally in the S&P but it did shake up the bears enough to fuel their propensity to throw in the towel. It also "feels" like some of the buying is the result of short call traders looking to offset their risk with long futures contracts.

"Normally" the week of option expiration (particularly the February exp.) sees some mid-week weakness but we have gotten the exact opposite. That said, the market also has a tendency to cause the most amount of pain to the most people. With that in mind, it is probably true that a post-expiration sell-off would do the trick. In other words, as much as we would like to see it...today won't be the day. Once all of those holding February puts see their holdings expire worthless, and those with short calls, see their now covered calls unwind at losses; the long-awaited correction might be possible.

One thing is for sure, this market is exhausting and the volume stats prove it. Traders are simply running low on money, margin and energy. The bulls have been waiting for a dip to get in, the bears a dip to get out...and neither are getting what they are looking for. In our last newsletter we noted a possible last ditch effort to push the S&P to 1338 and the Russell to 839, and here it is. If the bears are going to get something done, it will need to be sooner rather than later!

If you are following our short call recommendation in the S&P, we are obviously a little underwater on the 1350's. Clients that were willing to add risk were recommended to "dollar cost average" the position by selling the 1360's for about 9.50. We would like to reduce risk exposure on a quick pullback if it happens by recommending to offset the add on position.

* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

**Seasonality is already factored into current prices, any references to such does not indicate future market action.

Please note: An e-mini S&P and e-mini NASDAQ chart are used because they better for charting purposes, but trade recommendations can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.

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For more from Carley, visit DeCarley Trading and register for her free e-newsletter.