The stock market has been moving sideways in a narrow trading range for the past month. Trading ranges are always due to a balance between buying and selling pressures. A strong move is required to establish a new trend direction.
The current advance shows signs of losing upside momentum. This may be due to portfolio managers wanting to lock in profits for the year. We should expect a lot of position shuffling and increased volatility in late December and early January.
We will maintain our relatively conservative posture until the market breaks out of the current trading range. If an uptrend is established we will add equity position.