Stock Market -- Technical

S&P 500: 1260

I am impressed enough with the upwave in the market since October
to look for it to move higher, with the S&P 500 now expected to
rise to the 1310 area at some point well into January.

The move in the S&P from 1248 to 1268 over the week of 11/18 - 11/25
was a pleasant surprise but the sideways to down action since then
was not a surprise, as the market had become short term overbought as
indicated in the last technical comment on 11/19.

The impulse up during October and November was clearly strong enough
to warrant an extended consolidation, which could easily last another
week or two before we begin to run out of time in looking for a resumption
of the rally. I am also uncomfortable with the high degree of bullish
sentiment I see in the popular gauges such as Marketvane and Consensus,
so a brief continuation of the sideways/down bias might be in order
to reduce the head on this glass of beer.

If I have a more substantive bother, it would be in the intermarket
area where the charts for oil and the bond yield are no longer
so hospitable to stocks as during most of November. The tenacity of
oil around $60 has been a surprise as this is a seasonally weak period
for oil.

I plan to discuss the stock market more fully as we get a little bit
closer to 2006.