The inflation data was a bit hotter than expected but the market didn't care as the rally continues. The Dow gained 235 points on average volume. The advance/declines were positive. The summation index continues to trend higher. The NASDAQ led the way up and that's a plus. The S&P 500 closed at a new all time high. It remains short term overbought as it has been for weeks and months. Not sure how long it can go on like this but obviously it's longer than we think. Probably will not attempt any SPY trades before the end of this option expiration week. Only possibility would be the SPY March puts ahead of Thursdays inflation reoport. But we see that idea would have been a loser ahead of todays CPI data. Gold took a breather as the futures were off over $25. The US dollar ended around unchanged after being higher early on. Interest rates were up. The XAU fell 1 7/8 and GDX lost over 1/2. They did finish up from the worst levels on the session. Volume remains above average here. The gold shares remain short term overbought and are due for a rest. I still like the GDX April calls as the next trade but will try and wait for some more pullback before trying this idea. Money has been pouring into this sector so we have to believe that the rise is the start of something real to the upside. I could be wrong. Resistance at 31.5 on GDX so we should at least make it up to that level on this move. Mentally I'm feeling OK. The VIX was lower today and the short term indicators have now rolled over. This implies more upside in the near term for stocks. We'll see. Perhaps we are just witnessing the positive expiration bias in play. Whatever the case you cannot argue with price. Asia was generally higher and Europe was up in last nights trade. We'll keep an eye on the overnight headlines.