Looks like we are slowly stair stepping our way to higher levels - the bull is still intact from my perspective. The rally the other day in the Treasury-bond market could be suggesting that the Federal Reserve, which meets Tuesday, could send a clear signal that policymakers will stop raising interest rates sooner rather than later. If so, that would be a boon for stocks next week.
To jittery investors, higher energy prices and a cooling housing market mean bad news for consumer spending. With a few weeks to go before Christmas, that could mean doom for the hoped-for Santa Claus rally, but I don't think so. For those of us who have made big bets that stocks would continue to surge in December could take a hit if the run-up is over, but I don't think so. There is much performance anxiety out there with 8,000 hedge funds chasing performance and some active traders got trapped anticipating a breakout but all will end well - I have confidence.
Watching the NYSE breadth MCSUM which is now at the +250 level, any move above that level will continue to support the idea a bull market is still going on, so next week or so will provide some additional longer term information regarding the longevity of the current advancing price structure. Every day all the way.
Dennis
