http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p38955316076&a=26ays6398464

25 days.  235 points.  Near 13%.  A spike driven through heart of the zombie bears (some of those profits taken ot of their hides).  Price now solidly in resistance, but resistance not putting up much resistance.  And the flash crash here proven to be trivial and not a major trend change.  (Well, maybe not trivial — a question we will address at greater length later in the week.)  As we have been saying the last several letters buying is in order and we even added to our UPRO position today.  (Not our favorite trade.)

A more dramatic look at this is furnished by the PnF chart:

http://stockcharts.com/freecharts/pnf.php?c=%24SPX,PWTADANRNO[PA][D][F1!3!!!2!20]

The column of xes is like the flower which stands up above neighbors (we know what happens to those –they will be shortened).  But the PnF method derives out of this a target price of 2549.

Yes, yes.  It’s true.  We don’t believe anything.  But we do analyze that a new bull market is beginning.  The recent sell off was necessary to set the stage for a new market.  After all you can’t have the muppets profiting disproportionately.  They must be restrained by well founded fear of volatility.

Many implications are implied here.  We will be addressing them in the near future.