The inflation data came and went. The Dow bounced around all session but had a positive bias. The most watched index gained 217 points on average volume. The advance/declines were around 3 to 1 positive again. The summation index continues to climb. The numbers on inflation came in where expected. The Dow led the way today. We are once again at the moment of truth as the S&P 500 is just below the 4000 level. That is where the down trend line that defines the bear market lives. I am pretty sure that this will be the time that we break through it. The S&P is short term overbought but during rallies it simply stays that way. We are almost into option expiration week and the usual positive bias. Next week is a holiday shortened trading week. As much as I'd like to try the SPY puts here, I think that we are going to get through the long term down trend line in the S&P and travel higher. We might pause at theses levels in the near term but the market wants to go higher. The strength in the summation index is telling us that. Gold rallied on the inflation data and the futures gained over twenty bucks. The US dollar was lower and is breaking longer term support. Interest rates dropped again. The XAU added 2 points, while GDX was up over 1/2. Volume was good to the upside as the rally here continues despite the short term overbought conditions. There's nothing in the way to keep things from going higher. Mentally I'm feeling OK. The VIX had the big move that the contracting Bollinger bands projected and it was to the downside. The VIX closed below the 19 level and implies that the path of least resistance for stock prices is up. This is another reason why we think that the resistance for the S&P will be taken out and the bear market will be declared over. Short term oversold for the VIX but it will stay that way for a while during up swings. All around the technical evidence is pointing to higher prices as we continue through January. Only a week to go in teh January option cycle and I don't see a trade worth risking at the moment. We'll see. Europe and Asia showed gains in last nights trade. We'll see how things close out the week tomorrow.