Santa Arrives Late. Bulls Back in Control
Between my concerns about the last five days of the year and then the bullishness of the first day of the New Year, the market has been cooperating. Monday’s burst to new highs in essentially all of the major stock market indices puts the bulls firmly back in charge with the likelihood for some upside follow through on Wednesday. None of the major indices are doing anything wrong at the moment and they are all in sync to the upside. As such, unless the bears surprise today, the Santa Claus Rally will not fail to call and bears will not come to Broad and Wall, at least not in the near future.
While discretionary and transports both say all-time highs to begin the year, banks and semis did not. While neither of the laggards look worrisome, it’s something to keep in the back of your mind for later this quarter, especially if they start to decline when everything else rallies.
Sentiment is getting a little giddy as options traders are betting on a continuation of the advance. They don’t normally win. It looks like stocks should be building towards a short-term peak over the coming week or so before heading higher again later in January or early February to what could be a more meaningful high.
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