Thanksgiving Week seasonality started early, with a strong move on Monday and came to an early end with weaker action on the Friday half-day session. It is likely that there is some anticipation of weaker action next week, when seasonal influences wane. In addition, the indices are quite extended and have not had any notable rest since early October.
Trying to anticipate when the indices may finally rest has been an impossible task, but the odds of some softer action have been increasing. It isn't just the long-suffering bears that are rooting for the market to slow down. Many bulls would like to see some selling at this juncture, as it would be a better technical setup for the traditional end of the year strength.
One factor that will be of particular interest this December will be tax moves. There are some stocks with some huge gains and plenty that have done nothing. There will be some focus on harvesting tax losses to offset realized gains, but there will also be a desire to produce relative performance and to delay triggering gains this year.
It will be a tricky environment for those that are focusing on tax issues. One area of trading that I will be looking at is a "January Effect" for small-caps that are sold in December for tax losses. Many of these will be in position to rebound once that pressure is removed.
In the near term, this market is ripe for consolidation or pullbacks, but it is so well anticipated that it may not develop in an obvious manner.
It has been a good run recently and my game plan is to make sure I keep my accounts as close to all-time highs as possible. That doesn't require a bearish bias. It just requires discipline.
Have a great weekend. Rest up, as next week is likely to provide some interesting challenges.