Obviously One Should Never Read Too Much Into Holiday Trading

We had some traditional holiday trading today with some good, but thin, action in a variety of momentum groups like small-cap China, fertilizers and big-cap technology, but it was the weak dollar that really drove the action. The dollar fell sharply, and that drove gold to new highs and propelled oil and commodities.

It is exactly the sort of action you expect to see around the holidays. There is an upbeat mood, and although volume was very light, market players were happy to chase a number of stocks higher.

The important thing to remember about a day like this is that it isn't very significant. Many of the moves will likely be reversed fairly soon, but it makes for good trading. The technical patterns in the major indices are still quite positive, and there aren't any major technical roadblocks in the near term. We have all the same macroeconomic concerns we have had for a long while, and the market still doesn't care.

I don't like how tied the market action is to movement in the dollar. It is really becoming quite extreme, and when we finally get a bounce in the dollar, stocks are likely to suffer a quick spike down. It is impossible to time when that might occur, so the best we can do is to be very aware of the correlation to the dollar and monitor it carefully.

This has been a particularly tough year for many, and it is very easy to feel like you are caught in a downward spiral. The best thing you can do is try to stay focused on the positive and give thanks for the good things you have, even it's just cranberry sauce in a can.....