http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=9&dy=0&id=p83750808625&a=214966864

Bernanke sparks major rally, changing the context altogether.  Investors and traders have been in a state of high anxiety for months about (ta-dum) the dreaded taper, or as it is sometimes known the removal of the punch bowl.  When Bernanke said that he was just going to pour in a little less gin the market got all giddy and blew out the shorts.  Shorts and contrarians have controlled the market the last (m/l) 14 days.  This will shake their confidence — a new high close.  But not a new high.  Nevertheless the pattern is broken.  Now we must see follow up and confirmation.

A closer look:

Here we can see both the Basing Point stop (1547.68) and the New High stop (1695.74).  We can also see the virtue of long term patience on a day with a bonus of 30 S&P points.  Now we wait to see if this has broken the morale of the contrarians — for the nonce at least.  Contrarians are like rust. They never sleep.  But they’ll have nightmares tonight.