Technically, much has been made of the “golden cross” formation as the 50-day moving average (MA) has moved up through the 200-day MA. Be it an index or a stock, I have personally found this to be of little historic significance, though the distance a stock has moved relative to these averages has proven to be important in determining advantageous entry and exit points. Otherwise, the crossing of the 2 MAs is of little predictive value, particularly when the 200-day MA is in the process of moving lower -- and would move still lower, should the market significantly correct.

More importantly, as we approach quarter's end, the market is up 16% for the period and up over 24% for the past 4 months. Following the volume spike that occurred on May 8, the market was up over 40% from the March lows. The question now is where to go and what to watch for from here.

While technical analysis (TA) illustrates the market, it's the fundamental indicators (FEI) that define the market. I believe the current market setup and overall market environment is a perfect example of that distinction. At this point in the market cycle, the trend is being determined by the actions of the Federal Reserve and their continued commitment to quantitative easing.

As a result, sector allocations, diversification, and rotations are subjected to the Fed's impact upon the dollar and the perception of global recovery. Weak dollar plays and potential inflationary pressures are evident daily as sector rotations swing between materials, copper, commodities, agricultural chemicals-fertilizers, and the defensive eat-it-drink-it-smoke it, biotech, big-cap pharma, retail cohorts.

Tech, it would appear, has managed to once again create its own bull market and effectively construct a rotation within the sector based upon news flow, new product introduction, and anecdotal stories on subjects ranging from Steve Jobs' health to 3G (AAPL) phone preferences. The sector's a very volatile beta ride, at best.

While the trading range remains intact, the action is in the trading and rotation of these sectors. While it has been and remains a “trader’s market,” opportunity still exists for investors: By establishing and building upon long-term core positions as rotations move from overbought to oversold, profits can still be made. The recent volatility in the fertilizer stocks is an excellent example.

My approach remains to be focused on price-sensitive add- and entry points in the very highest quality names with the yield support necessary to withstand a breakdown of the trend channel below 875 on the cash S&P. This would allow me to add and trade around the position on a retest, and perhaps breakout above the 950 resistance level.