After yesterday's late-day blast and this morning's quick jaunt to the upside, the bulls are busy telling anyone that will listen that it is rally time now that the major indices have all broken above their respective 50-day moving averages.
However, since trading is quite thin, just about everyone has something negative to say about the move. As we’ve mentioned a time or two lately, the market had been setting up for a rally over the past couple of weeks, so the move is not exactly surprising. Although we will have to admit that we were looking for some upside a bit sooner than the last two trading sessions of the year.
In terms of how much farther we can go from here, the good news is that we've got seasonality on our side and there remains a healthy dose of skepticism in the market. But, the bad news is that there is significant overhead resistance looming at the Dow 9000 level. Thus, we should recognize that we are currently in a range bound environment and that there will undoubtedly be sellers at the Dow 9000 and S&P 915 levels.
But... if the bulls can somehow find a way to break through these lines-in-the-sand, then we might see an expansion of the range up to the 9500 zone.
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