What a week! My sense is that the watershed event that occurred was the plunge in the bond market (climb in yield), which I suspect is the beginning of a relentless back-up on the long end of the curve in response to the "inflationary" environment exuded by equities and commodities that has resulted from the constant creation of money and easy credit for years.

In other words, up until this week, it seemed to me that the bond market was reacting to evidence of waning growth in the U.S. more so than to domestic and global monetary and goods inflation.

Perhaps not so anymore, however. Now the bond vigilantes may be poised to pounce on prices to elevate yields to the "ouch" point of equity investors. Where that is, who knows? But for sure it is much higher than 4.80%.

For the immediate future then, equity prices still have room for considerably more upside... as evidenced by the long-term weekly chart of the SPX.

The incredible upmove off of the March pivot low at 1363.98 continues Ð- to new recovery, intraday, and closing highs at 1522.75, and just 1.9% from testing the March 2000 high at 1552.87!

Based on the weekly chart and various measurements off of the lower base formation(s), the SPX projects beyond the 1552.87 into the 1570-80 target zone, which is ÒonlyÓ 3.5% from todayÕs close.

If the SPX Òmelts up,Ó then perhaps we might see a classic blow-off of, say, 10%, or to a target of 1650-1675. Who knows? Right now this is one very powerful advance that shows no signs of wavering. Only the back up in 10-year yield gives me pause, but at 4.80% yield will have to race higher to put the kibosh on equity investors.