Will The Bulls Hang Around?

The holiday party has lasted for three days now, and the big question is whether the bulls will hang around again tomorrow. I'm sure some are going to be tempted to lock in gains before they head over the river and through the woods to grandma's house for the holidays.

The good news for the bulls is that there really isn't any obvious reason to dislike this market. The best bearish argument is that no one seems particularly worried. We are acting like we don't have a care in the world. With holiday cheer in the air, maybe we don't.

So the big question is whether, after three days of very positive action, the good mood can last. When will some profit-taking finally hit? Trying to anticipate weakness in the market has been the single biggest mistake traders have made this year. They are constantly run over and turned into short-squeeze fodder.

While some profit-taking would seem reasonable before a 3½ day break, I'd actually want to see some selling kick in before I hit the exits more aggressively. We continue to hold well above key support levels, and the minor dips are being bought. We have to respect that type of action regardless of how complacent the market might feel. The No. 1 one rule is to always respect the price action and not to fight it.....