With the breakout above the 920 level still holding in the face of EXTREME overbought readings, the bulls now have the upper hand. If the bears have any ammo left it better show up soon.

Don't be surprised if the market breaks back below the 920 level for a day or so. It really needs a rest before it starts the next leg of this "phase 2" rally. Did I mention how overbought it is? I thought so. A break back below 920 will also serve to suck in some desperate perma bears eager for Armageddon to show up sooner rather than later.

The reflation trade appears to be back on for now. The CRB index acts like it wants to get up out of its death bed and go for a walk. The only problem I see is that the dollar acts like it wants to restart its rally. If it does, expect commodities to continue to struggle. Also a strong dollar may be a negative for equities, so watch out for that.

A move to at least 1000 in the S&P almost seems a given at this point. It's just a matter of how it completes the trip. It would take a break below 850 to negate that scenario for me.

If you've been reading me for long then you know that I've been looking for a move higher into the spring, similar to the winter-spring move up in 1929-30. That scenario appears to be a real possibility tonight. If it occurs it may set up the greatest shorting opportunity of our life time. We'll cross that bridge IF we get to it.

But as always, beware of a possible breakdown. I don't expect it yet, but these are not normal times we live in. Oh, and by the way, did I mention how  overbought the markets are?