The Christmas Eve Rally was not unexpected as momentum continues to build for stocks. Volume was light which was also expected, so the lack of market participants does not give us a true picture of sentiment. In other words, we can just ignore the volume on Christmas Eve and look at a host of other indicators for sentiment.

The first place we look is to the left on the chart of the NASDAQ which tells us that there is no overhead resistance because the index was once again out to a new high with the exception of the high in the year 2000. If stocks keep up their present pace and strength, that old high in the year 2000 could be surpassed. The NASDAQ is 1000 points away from that all-time high. To get a good perspective on the relationship of Tuesday’s close to the all-time high, take a look at a quarterly chart of the NASDAQ. Read full report