Santa Claus Drift + Light Volume Drift =

This week often follows a pattern of light volume upward drifting with soft rallies. Big Money is usually already on vacation and the trading desks are being run by the third string. Throw in a little Santa Claus emotion and we have the recipe for a floater day, and possibly a soft, floater week.

Pre-market futures are perhaps already reflecting that sentiment with a flat open. The end-of-day chart on the SPX from Friday has the price points to watch out for today. I will have a soft upward bias to the week - not because the charts or the fundamentals dictate the bias - but because of experience with Hedgies and Retail traders on light volume weeks.

Here is a chart of the Dow to go along with the SPX:
(click on image to enlarge)

The 8,500 area is important to sustaining the current consolidation. If the Dow drops much below 8,500 then it changes the holding pattern and puts the market back into an intermediate term neutral to slightly bearish posture. If we get upward drift today, I don't expect traders to push the Dow over 8,750. We'll see how this week goes.....

12:15 pm MT: It looks like the drift is down today. The Dow has dropped below important levels and is likely headed for some more selling intra-day. It doesn't appear like the Bulls are interested right now, so this could continue to slough and grind for the remainder of the day. I saw no catalyst to buy calls today. Instead, there have been two nice Bear Flags intra-day for puts. Market volume will probably get softer the closer we get to Christmas.....