Tame inflation data led to a huge rally today as the Dow soared 535 on good volume. The advance/declines were better than 5 to 1 positive. The summation index continues higher. The NASDAQ led the way up and that's a plus. The small stocks have been leaders both on the way down and on the way back up. The S&P 500 remains short term overbought and has now crossed 4200. The bear looks to be dead. Yes we are still thinking about the SPY puts but we don't want to get in front of this move up. It could simply plow higher into the expiration next week. Down trend lines that have been in effect since the beginning of the decline are being broken on some of the major averages. The producer prices tomorrow should bode well for more gains. Gold dropped $5 on the futures. The US dollar sank, while interest rates were a bit lower after being down more early on. The XAU was up 1 1/3 and GDX had a fractional gain. Volume was light. I do still have an open order out for the GDX September calls but am considering canceling it. Mentally I'm feeling a bit frustrated as the long term money we have wasn't deployed after the market dropped over 20%. We were looking at it but did not do anything. The rally here is for real and we don't see the market getting back towards 3600 again. The VIX had a big drop and is now below the 20 level. This is what we've been waiting for but now we're here and it feels like it will simply continue lower. Oversold for an extremely long time on the daily VIX. But if it simply continues to move lower here below 20 it is another confirmation that the bear market is over. We cannot argue with the charts. I'll think about whether or not I want to take the risk of trying the SPY August puts tonight and perhaps place an overnight order. Asia lower and Europe higher overnight. We'll look for some upside follow through tomorrow.