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It was another early morning sell-off and just like the last two days stocks staged a comeback to trade around the flat line for a good portion of the trading day. But some last minute selling pressure pushed some of those averages into the red at the close. Still, the Nasdaq close positive so the bulls would appear to have won the battle again as losses were modest in the DOW and S&P 500.



Prior to the open, the December payrolls report ...

I've been looking for weakness and we've been getting it, but it isn't sticking. Bullish? Or is this up move getting tired? It isn't as though the broader market is running away to the upside and it's having to fight off some moderate selling pressure so far this week.

Overseas, economic conditions in euro-land haven't changed. In fact, the euro fell more than 1% to a 15-month low today.

Here at home, the latest ADP Employment Change provided some reason for optimism ...

There wasn't much to drive trading today, but the market did recover nicely from some early selling pressure to finish mixed on the day. Thus ended the last day of what constitutes the Santa Claus rally time frame.

Here's the charts:



NAMO and NYMO both dipped a bit, but retained their buy status.



NAHL and NYHL also dipped, but one signal (NYHL) crossed over to a ...

Obviously, the Santa Claus rally remains intact with one more day to go. More follow through? My guess is yes. More on that in a moment.



The stock market took its lead from the overseas markets and kept the SC rally going. There wasn't a lot to drive the action, but there were some data points.

The December ISM Manufacturing Index rose to 53.9 from November's 52.7 reading and was also a bit higher than expected.
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Last week, the Top 50 had increased their stock exposure by 27.62%. The herd increased theirs by 7.68%. Total stock allocations were high with the Top 50 sporting a 72.32% stock allocation, while the herd was holding a 63.06 allocation. Stocks were down moderately overall last week, but volatility offered some measure of opportunities for those who were nimble.

This week, the first week of the new year, stock allocations start out at a more modest level than last week's numbers. Here's ...