It took a bit longer than many had expected, but the end-of-the-year rally finally kicked in Tuesday and we've been climbing slowly higher on declining volume since. In retrospect, the selling and negativity we had Tuesday was really the perfect setup for the turn. It assured that folks were out of position and set the stage for some chasing.

As has been the tendency once the turn occurred, we had V-shaped action, so thank you machines and algos. There was a little nervousness following a poor report form ORCL, but it was shrugged off and the bulls kept chugging along. The extremely light volume makes it challenging to jump aboard, but we have seen these sorts of moves so often it really shouldn't be a surprise.

The question now is whether the bulls will keep pushing next week. We have some obvious overhead resistance to contend with at the 200-day simple moving average and are a bit overbought, but these low-volume moves higher always seem to last longer than seems reasonable.

One thing we need to keep in mind next week is that there is often major repositioning as the year comes to end. It is not unusual to have some sharp selling in the last couple days of the year. For example, on the last day of 2009 we were down about 1% and in the last three days of 2007 we dropped more than 2%.

It has not been a good year for many fund managers, and they will be happy to sell losers and start with plenty of cash in 2012.