Take the Dow's 50% retracement level, toss in the S&P and NYSE sitting on their November lows and mix with extreme oversold conditions. Then stir overnight and presto, out pops a 3% rally cooked just right, and none to soon for the hungry masses standing on the edge of the abyss. It was a tasty treat indeed.....unless you were short.

This turn today could matter, at least for a while. How the market handles todays success will tell us a lot. Many people think this is a repeat of the 2002-2003 bottoming process. I understand the thought process on that....the charts are similar, the divergences with the VIX making lower spike highs with prices making lower lows, yada, yada, yada I get it. I was there in March 2003. I recognized the exact low tick that day and called it. I don't think we've seen the low tick for this Bear just yet.

However, I'm leaving the door open that a significant rally could result from this setup. It would be the one we've been waiting on to retrace some of this decline. Today could seriously be the start of that. We'll find out soon enough. If it doesn't happen here, at these levels and with this setup, the S&P may just head straight for 600.

Gold, silver and the XAU began to show the weakness today the charts suggested to me. As I've mentioned, they appear to be megaphone patterns, which are ending patterns. What happens after this decline is not clear. Perhaps the gold and silver stocks will go back and make a double bottom. That's a real possibility and could be very bullish longer term.