Santa Claus Rally Will Push Stocks Higher This Week – Raise Stops – Protect Profits

Posted 9:50 AM ET - Last week the market floated higher on light news and we are challenging the all-time high. Seasonal strength has taken over and shorts are not going to stand in the way. Greek elections did not go well and the anti-austerity party is gaining strength. There will be a final parliamentary election in 2015 and Greece could be back in the headlines. Their 10 year bond yields are at 9% and European stocks are weak. This will be an event to monitor, but I don't believe it will be an issue this week. The news is light this week and New Year's will bisect trading. Initial jobless claims, official PMI's and Chicago PMI are the only releases scheduled. Labor reports (ADP and the Unemployment Report) will be posted next week. US GDP grew 5% and domestic economic activity is strong. Oil stocks have been beaten down and they will not weigh on the market as they have in recent weeks. Consumers will benefit from lower gasoline prices and holiday retail sales should be robust. Seasonal strength will offset any Greek jitters. The market should float higher into year-end. Keep your size small and protect profits. As we saw two weeks ago, these light volume rallies are vulnerable to profit-taking. As the market moves higher, move your stops up. If you are long call options, use the stock's prior day's low as your stop. If you are trading breakouts, use the breakout as your stop. If you are trading SPY, use $207 as your stop. . .

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