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It takes a bear to know one, and I think the bears are really struggling with this momentum change in the US market.

In the immediate term, I see a narrowing trading range developing (see chart). On balance, this is bullish. For now, the days of an 80 VIX are gone. From a short term momentum perspective, breaking and closing below 62.26 is negative for the VIX. Deflating volatility with accelerating volume on up days provides for a new range to trade the SP500 with an upward bias. If the SP500 can hold my new line of support at 878, I wouldn’t be surprised to see the VIX test 50-52 on the downside.

There are two very important macro calendar catalysts that I foresee the bullish narrative clinging to. First will be Friday’s bullish PPI report (inflation is dead will be ringing all over Barons this weekend is my guess), then we will have “Heli-Ben” come in and drop FREE moneys from the heavens next week at the FOMC meeting.

At a bare minimum, don’t be short these 2 catalysts.

My immediate term upside “Trade” target for the SP500 is 931.