Happy Tuesday, one and all. Or, good Wednesday morning, depending on when you get around to reading this. You know, I had an epiphany this afternoon as I was browsing the comments from and about today's testimony from Fed Chairman Janet Yellen to the Senate Banking Committee - she's really good at not saying much of anything, but sounding like she's serving up some great insight. She may even be better at it than Ben Bernanke was. SCN Elite Opportunity Free Alerts Get premium select stock picks via email and mobile text alerts from our SmallCap Network Elite Opportunity Team. It's 100% FREE! No strings attached and no credit card required. Click here to sign-up today! That's not a dig on Yellen. The fact of the matter is, she's trying to hit a moving target, and at the end of the day the best any Fed chairman can do is take educated guesses about things are the way they are at any given time; none of us would do any better. But, Senate committees (and Senators) being what they are, she has to give them something that sounds concrete and complete, even if it's truly nothing more than fluff philosophy. And then I had another epiphany. All these Senate testimonies and Fed meeting minutes are really just a Rorschach test for the market. Some of you will immediately understand the analogy, and all of you will understand with just a little explanation. A Rorschach test is the ink blot test a psychologist or psychiatrist might perform on a patient in a clinical setting. A random spattering of ink on a sheet of paper is shown to the individual, and they're asked what they see. Though it's a picture of nothing, the theory is, what each individual sees in the abstract shape is a glimpse into what's consciously and subconsciously on their mind. After enough ink blots are viewed and labeled by a patient, the psychiatrist has a pretty good profile of that individual's psyche. What's this got to do with the market? In the same sense, today's words from Janet Yellen at the Senate hearing didn't really say much of anything. Yet, the market interpreted a great deal about what the word "patient" or lack thereof might mean in terms of timing a rate hike. A few folks even said she had turned hawkish. The reality is, however, there was nothing she said today that was no less ambiguous than what she'd said at most of the other recent events where she was put in the spotlight. It was the market's collective thinking that seemed to lead the masses to a conclusion, and that may have been largely based on what the masses want to see happen next. The moral of the story is, we should all be focusing more on the reaction to such events, and worry less about trying to interpret something specific from a deliberately ambiguous message. In today's case, the interpretation was clearly a bullish one. All of the indices moved on to new multi-year highs. In some cases, new record highs were hit. Even the NASDAQ is getting within reach of its 5132 peak from early 2000, with today's close near 4966. Just in the interest of brevity though, we'll keep our focus on the S&P 500 for the time being. Take a look. The trend is still gently rolling higher, as is the VIX's downtrend. The VIX even broke under a key floor at 14.4 today. While I'm still not a fan of stocks based on their ridiculous valuations at this time, like I mentioned to you on February 20th, if the trading mob isn't worried about valuations at this time and clearly responded bullishly to today's Rorschach test, there's no need to fight the trend just to make a point. The one thing I will say about this rally that I do like.... unlike most of the other recent surges that flamed out quickly because they burned up all their fuel in just a few days, this one is well paced. It's the difference between a drag racer and a Honda Civic. Your typical drag racing vehicle can burn as much as ten gallons of fuel just going a quarter of a mile down the road. It gets there fast, but doesn't get very far. Your typical Honda Civic, however, can travel 25 miles on just one gallon of gasoline, traveling at about 1/3 the speed of a drag racing car. Point being, it's all about pacing. This rally is fairly well paced, and that's why it could last a while. Don't read that the wrong way - there's room for stocks to slide back. It's just a question of whether or not that slide will snap the current uptrend. I know eventually we'll suffer a correction, but we can't be too presumptuous about when it's going to happen. We need at least a little hard evidence. We don't have any yet. My mental line in the for the S&P 500 is 2074, give or take, though it changes a little every day. As for an upside target, the upper edge of that long-term (and rising) trading range still looms above, currently at 2160. We'll see. The only thing still missing from this rally is volume, but it hasn't seemed to be a problem yet. It's Still Encouraging, Overall We'll wrap up with a quick look at a couple of charts. One of them was likely on your mind from yesterday's newsletter, but the other is one we've not mentioned until today. In Monday's newsletter we learned that January's existing home sales slumped a little, though not a lot. Either way, there's broad strength here suggesting the overall real estate market is healthy. Today we learned home prices continued to grow firmly through December. The Case-Shiller Index for the last month of last year was up 4.5% on a year-over-year basis. We're still waiting on the new home sales figure tomorrow and Thursday's FHFA housing price index due on Thursday to round out our comprehensive chart above, but based on what we've seen so far we can reasonably expect forward progress on both of those fronts. The new piece of economic data on our plate is consumer confidence for February. It fell from January's 103.8 to 96.4. Honestly though, it's not a reason to sweat. January's surge was an outlier, and it would have been a miracle to see another step forward. Our chart below compares the Conference Board's consumer confidence score to the similar Michigan Sentiment Index score. The Michigan sentiment Index will get its third and final update for February on Friday though it's not likely we'll see any major changes, if any change at all. Though both are off of peaks this month, the longer-term trend remains positive in each case. By the way, remember how we pointed out back on February 19th how the industrials sector was one of only a few must-have sectors for 2015? We didn't name any specific stocks, but we narrowed the list down quite a bit just by picking the right sector. Well, today the Elite Opportunity service picked a specific stock from the industrial sector, largely based on the same research and theory we gave you. As always, I can't tell you what it is, but I will let you know this is an oddly-undervalued name in the industrial space. Shares are currently trading at a trailing P/E of less than 10 with a long-term earnings growth projection well into double-digit territory. The company recently topped earnings estimates too, not to mention will be buying back about 7% of its float through a recently-announced share repurchase program. Frankly, we're all a little surprised this stock's still available at its current price. If you've been mulling signing up for the Elite Opportunity, this is the kind of pick that can make it worth your while to go ahead and do so today. Or, you can let everyone else be in on it except you. Your call. Here's how to become a member, or cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ Oh yeah, one more thing... Standard & Poor's has posted their marketwide earnings expectations for 2016. We'll get those forecasts out to you later this week when we take our next (and probably final) look at the fourth quarter earnings scoreboard.