Although just about everybody and their brother were fully expecting the market to give back some of its recent gains today, we had nice little day of holiday trading. Volume was thin, breadth was good, and except for a slight dip as the afternoon got under way, the bulls steadily pushed the market higher throughout the day. The bears typically give the bulls some room to run this time of year, but with the market running into overhead resistance on declining volume, it’s going to be tough for this market to make more progress to the upside.
While this is the sort of set-up that will get the bear licking their chops, we need to watch carefully to see how the market acts into a pullback. We haven’t seen any reason yet to become any less defensive, but we’ll be looking for indications that some positive seasonality might kick in as we head into December.