Whompa, what just happened on the XJO, just jumped 25...

Whompa, what just happened on the XJO, just jumped 25 points?

Anyway, better start contributing some more, its soooooo quiet. The bears must be hiding in their caves for now.
So, for me the big question is are we gonna see new highs above Feb highs, i.e. have we just undergone a bull trend pullback, or is it a trend change.

Lets check out the XSO/XJO ratio, which was screaming out for a pullback in Feb.



So, the basic premise is that the ratio represents appetite for risk in the market. The ratio was falling in Jan and Feb, which preceeded the fall in all equity markets. I assume the markets were waiting for a trigger to fall, and they got it with Middle East tensions and Japan disaster.
A close look at the ratio since the low, shows it recovering faster than the XJO, suggesting people are now prepared to take on more risk. This is why I am favouring (not expecting) a higher high and continuation of the bull trend. I also felt before the correction that we needed a move down, before we could run back up to decisively break 5000 for all XAO/XJO/SPI indices.
Maybe some short term pullbacks around here, but for now I am waiting to see if we get a H&S pattern, and if the XSO/XJO ratio shows any divergence in the mean time, but am currently 2 feet in the bullish camp.