An extremely slow day of trading set us up nicely for a little squeeze on European headlines this afternoon. But it didn't hold and we ended up closing flat. Volume was extremely light and breadth was on the negative side, but we still aren't seeing many signs of profit-taking. Market players continue to be more worried about missing out on further upside than about protecting recent profits.

The bulls have a couple of things working to their advantage right now. Too many folks are trying to play catch-up with the market and there is fear that we'll keep spiking higher as solutions to the European problems continue to roll out. We've had at least a dozen new European solutions celebrated in the past seven days of trading, and market players are expecting even more "good" news in the days ahead. Whether these solutions really are viable is irrelevant, since the buying reaction is reflexive at this point.

There is a quaint notion that markets that are extended on light volume and hitting resistance may be vulnerable to a pullback, but thinking like that has been the death of many bears in the last couple of years. We are right back in that situation and the most dangerous thing you can do is try to be logical about why a pullback would make sense. The setup we have now has tended to produce upside more often than not. Just look at what happened in October, when we had a very similar setup develop on Oct. 20. We gapped up the next day and kept running even more.

However, the biggest challenge is not the perverse technical action; it's that action is so slow and there's so little intraday movement.