We got the bounce we were looking for today as the Dow gained 526 points on light volume. The advance/declines were around 3 to 1 positive. The summation index is still moving lower. One of the hallmarks of a bear market is a rally that springs up out of nowhere. Todays fits that. But it is where we go from here that will determine the markets fate. If we continue higher into the end of the week, the bear case will lose steam. However if things turn back down from here going into the close on Friday, the bear lives. I'm not sure which way it goes but the S&P 500 is still short term oversold. One of the negatives lately has been the light volume but we are in the holiday season with many away from their desks. For now we will wait and see how it goes before attempting the next trade. Gold was flat on the futures. The US dollar was a bit higher and interest rates were steady. The gold shares followed the market higher. The XAU was up 1 1/3, while GDX rose 1/3. Volume was average. Sitting tight for now with the regards to the GDX January call idea. Will try and wait for GDX to get short term oversold again. Plenty of time left in the January option cycle. Mentally I'm feeling OK. The VIX dropped again and closed at the 20 level. The short term indicators here are heading lower and imply more gains for stocks in the near term. Not yet short term oversold. The VIX seems to be saying that there is nothing for the bulls to worry about as the 50 day moving average capped the recent rise here. If the VIX can get and stay below 20 it gives more credibility to the bullish case. Hasn't happened yet but we'll know more by the end of the week. For now we'll remain patient and let the market lead the way up or down. Not always the way we'd like it to be but there is not a clear signal to trade off of in my view at the moment. Asia was mixed and Europe higher overnight. We'll see how things go tomorrow.