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Good morning. It is said that Ms. Market will at times do whatever it takes to frustrate as many investors as she possibly can. So my assumption is that after a rip-roaring start to 2013 and only a single down day worth mentioning, a great many investors are frustrated these days. Those underinvested bulls are likely frustrated that they haven't had the opportunity to "buy the dip" that everyone has been yammering on about lately. And of course, the bears have to be more than a little frustrated with the fact that they've been almost completely shut out of the game since the end of December.

If I had to place a bet, I'd put my money on the glass-is-half-empty gang to win the current round of the frustration game. After all, it appeared that our friends in fur had a stellar opportunity to start dancing to the downside on Monday. Stocks were coming off a fresh new high, the indices had become overbought, the trend was looking extended, sentiment was starting to get a bit giddy, and Europe was suddenly tanking. And I can tell you with absolute certainty that my friends in the bear camp were licking their chops at a chance to do some damage.

But before you could figure out "who was who" in the current drama playing out across the pond, the downside pressure evaporated. Just when you thought the bulls would step aside and let their opponents have a few days in the sun, the indices find themselves back to within spitting distance of new bull-market highs. As such, frustration is very likely the word of the day in the bear den right now.

This is not to say that the bears won't come right back sometime soon. Remember, this bunch is nothing if not relentless and Europe IS in play again right now (there is an ECB meeting today, an EU summit this week, a scandal in Spain and an election coming up in Italy). But, as an objective observer of the action, I've got to say that the bulls remain in possession of the ball.

Everyone agrees that stocks are overbought. And most technicians will attest to the fact that the sentiment readings are now solidly in the danger zone. Therefore, the expectations among a great many market participants are that stocks simply must pull back in the near term. But this is where the frustration comes in.

You see, before the stock market was controlled by the headlines, news, and rumors from across the pond and before every tick in the euro was met with an algorithm for the S&P 500, stocks needed a reason to decline. And while it may be frustrating for the bears to hear, the bottom line is there doesn't appear to be a reason for stocks to pull back at the present time. Remember, an overbought condition, in and of itself, is not a reason for stocks to fall.

Yet on the other side of the aisle, the bulls seem to have a handful of reasons to keep on keepin' on. The economies of the world are improving, housing is rebounding, earnings aren't half bad, valuations are fair, interest rates are low - and likely to stay that way for some time yet - and inflation is nowhere to be found. So, as long as Europe doesn't implode and/or the folks in Washington don't do something idiotic, it would seem that from a big-picture standpoint, the path of least resistance for the market is up. Especially with the public deciding to return to the game and the hedgies rotating out of the safety play of bonds and into stocks.

However, the simple fact of the matter is that stocks have indeed run a long way in a short period of time. And as such, the bulls have earned a rest. So, IF (note the use of capital letters) the bears can find a catalyst, a pullback to take some of the giddiness out of the move would be logical.

But the key point this morning is that unless the environment were to suddenly change, any pullbacks will likely be short and shallow as those underinvested and frustrated bulls should continue to buy the dips. Therefore, sideways just might be the new down for a while.

Turning to this morning ... The overnight markets were mixed with Asia down and Europe up. Traders are waiting on the ECB rate announcement and Draghi's press conference as well as the economic data to be released here in the U.S. As such, futures are trading close to breakeven at this point.

Pre-Game Indicators
Here are the Pre-Market indicators we review each morning before the opening bell ...
Major Foreign Markets:
- Shanghai: -0.64%
- Hong Kong: -0.34%
- Japan: -0.93%
- France: +0.33%
- Germany: +0.47%
- Italy: +0.98%
- Spain: +1.15%
- London: -0.23%
Crude Oil Futures: +$0.36 to $96.98
Gold: -$1.60 to $1677.20
Dollar: higher against the yen, lower vs. euro, and pound
10-Year Bond Yield: Currently trading at 1.987%
Stock Futures Ahead of Open in U.S. (relative to fair value):
- S&P 500: -0.22
- Dow Jones Industrial Average: +0.50
- NASDAQ Composite: -2.80
Thought For The Day ...

If you want to live, give up your foolishness and let understanding guide your steps. -Proverbs 9:6

Positions in stocks mentioned: none
Source: Daily State Of The Markets: It May Be Frustrating, But ...