http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p16768279576&a=214966864

In a fit of relief the market responded to the long debated fiscal cliff avoidance by Congress and blew away on the upside. We closed all our hedges and are outright long. We said awhile back that this event — one way or the other — would be extremely volatile, and so it was. It could easily have been the same on a wave down. Now prices are sitting right at resistance, and it would be completely expected to see contrarians take some profits tomorrow and knock the market down some. If you have a hedge on you can seize that opportunity to liquidate them. Otherwise we think that we should see up waves until the clowns get their act together again and start a new round of the Washington follies.

it bears noticing that this is an extreme event, and extreme events often have consequences that are not immediately obvious. At a lessor scale this would be a flagrant buy signal — and that is how we are treating it for the moment. Readers who elected, as we have repeatedly urged over the past month, to observe the long term stop have beaten the market here and deserve to have done so. And what theme, that we sing so often, prove? Something about long term investing.