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Is the Santa rally real?

December 29th, 2009 Kipp

The Dow Jones Industrial Average has seen a nice move up for the past 6 days in a row with a breakout above the 52 week high the past 2 days!  Although the trends have remained fairly strong through this "V bottom" recovery, we have seen the Dow and the S&P 500 stuck within a tight range for the past month.  Investors have been looking for a big breakout or break down from this channel!  Typically when you get a breakout, it occurs on heavy volume.  At this point I am not seeing much conviction to this move.  Plus, you have many big Wall Street traders on vacation this week.   I know it’s easy to get excited when you see the markets moving, but I would remain cautious until we are through the first week of the New Year.  At this point, even though we have technically “broken out” of the channel, I am not calling this a “breakout” just yet. 

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