Gotta be honest here.... I spent the better part of the day trying to talk myself out of writing about today's topic. Aside from being a bit of an enigma, what I'm going to say to you is probably going to be a fairly unpopular idea, and I'm not sure I want stir up a hornet's nest. Yet, I wasn't able to avoid it. We've always made a point here at the SCN to tell investors things they need to know, because the mainstream media machine doesn't always do so (even though it often feels like they do). With that as the backdrop, let's just go ahead and yank this band-aid off - coal prices are not only on the mend after a multi-year lull, but coal stocks may also be a Cinderella story for 2014 and 2015. This is where many of you will respond with "but coal is unpopular with the federal government's legislative branch, and generally distasteful, especially now that we have viable options with solar, geothermal, and natural gas." I get that. Heck, I agree with that response. On the other hand, we can sit back and debate the logic of coal's resurgence all we want to without changing the fact that the coal industry appears to be on the mend. As proof of the premise, let's start with a look at a long-term chart of Appalachian coal prices. The big pullback from the late-2010 peak of $80 per ton to a low of $51 per ton last year isn't a surprise; we all knew it was happening. Yet, this chart's been acting funny - as in not decidedly bearish - since late 2012. In fact, coal prices have rallied 18% since that 2013 low, and are currently resting at $60.40. As you can see on the chart, that move leaves the commodity within striking distance of a big ceiling around $62/ton. So far it's not broken through it, but the bulls seem to have the momentum here. The $64,000 question is, how did this happen when coal was supposed to be on its deathbed just a few years ago? Like so many other things, rumors of coal's death have been greatly exaggerated. As it turns out, China is still buying it in droves to power its ongoing growth efforts. It's not just China, however. Europe is wading back into the coal pile too, as its flimsy rebound efforts are at least partially dependent on cheaper sources of energy. And, amazingly enough, despite efforts to limit its usage, the good ol' U.S. of A. is now on pace to once again increase the use of coal as a source of energy. In 2013, the amount of our electricity that was generated by coal fell to a multi-year (and I believe multi-decade) low of 39.0%, but that percentage is now projected to rise back to 40.3% by 2016. The reason? You can partially thank natural gas. While it was dirt cheap in 2011 and 2012 when fracking was in its heyday, natural gas prices have since clawed their way back from less than $2.00 to their current price of $$4.44. And this time, it doesn't look like it's going to fallback again. The problem is, with gas prices soaring and coal prices, well, at least not soaring, it's once again cheaper for some utility companies to burn coal rather than natural gas. Sorry environmentalists, but at the end of the day it's more about the Benjamins than it is about Mother Earth. But didn't James River Coal (JRCC) file bankruptcy just today, underscoring the industry's problems? Yes it did, but with the exception of JRCC, most coal stocks have been doing pretty well of late, fueled by some optimism we hadn't heard in a long while. BHP Billiton (BHP) sees a light at the end of the tunnel. Consol Energy (CNX) upped its original coal production forecasts for 2014. Arch Coal (ACI) shares are up 33% in less than two months. While it's still a bit obscured, this is the most compelling industry-wide tone we've seen in years, despite James River Coal's news. For what it's worth, the U.S. Energy Information Administration also sees coal consumption in the United States increasing this year to near-record levels, and holding pretty steady at that level next year. The EIA has no vested interest in inflating those numbers, so I'll take them at face value. I'll confess I'm still not totally wild about the very unpopular idea. Charts don't lie though, and I can't tell you how many times I've seen a left-for-dead stock or industry come back to life and surprise the world. First Solar (FSLR) and GameStop (GME) come to mind. So does Hewlett-Packard (HPQ). That said, the fact that there's still so much doubt about these names has my contrarian side salivating, particularly if coal prices (Appalachian coal to be specific) can quietly work its way above $62/ton. That would be a huge sign of what people/companies ARE doing with their money, despite what the media says is happening. I can still see the industry's stocks being inconsistent with any forward progress they make, but for speculators who can navigate the volatility and/or deal with a setback, coal stocks may be worth a closer look... if only because nobody else is really looking at them right now. We'll follow up on the coal saga as needed. Just remember you heard it here first. Now, about this market... A Good, Though Not Big, Step Forward It may not have been a red hot move, but I think today's action from the market confirms the selloff had run its course, and that there's a floor for the S&P 500 at 1840. We actually made a slightly lower low on Tuesday, but it was only just low enough to make a few folks think we were headed over a cliff before bouncing back... ensuring that the market once again aggravated as many people as possible, as much as possible. I really have a feeling the bulls are going to build on today's action over the course of the rest of this week, though I'll feel considerably better once the S&P 500 makes its way back above the 20-day moving average line at 1863. Since we've been scrutinizing the NASDAQ Composite as well, let's take a look at it too, although it's telling the same basic story as the S&P 500's chart - we probably finalized the reversal effort today, and from here the bulls are going to trickle back in. We can also see on our NASDAQ chart today that the VXN has indeed hit a ceiling around 20.0, and is peeling back from it. That's really all there is to say about it. While I'd still like to see both indices put a little more distance between themselves and this week's lows, it appears that's where things are going. There's always a chance we could teeter over the edge, but I'd guess the odds of that happening just went from 50/50 to 30/70... in favor of an upward move. Now, let's see if earnings season can throw a wrench in the works.