Can Stocks Make It Seven In A Row?

Stocks are basically up six days in a row (one day was flat), which is a pretty long streak.  Stocks moved lower in early trading as I'm sure some profit taking set in.  But many investors are likely hesitant to take too many profits this year with few losses to offset them.  That could make for some delayed profit taking in the early part of the new year.

Volume is running very light in this holiday week, and there isn't much in the way of market moving news either.

One stock getting a lot of attention is Twitter (TWTR), which has been on a huge tear and the stock has gone straight up - a la 1999.  One brokerage firm downgraded the stock this morning and that has caused a reversal with TWTR down -6% so far. 

Asian markets were higher overnight with Japan at multi-year highs.  China was higher also after the Ministry of Commerce reiterated its year-end forecast for retail sales growth of 13.0% and industrial production up 9.8%.  European markets are also near their highs.

The 10-year yield is flirting with the 3.0% level.  This is a key psychological level and could provide some resistance to the upward trend in yields.

Oil prices are also higher and topping the $100 mark today.  We haven't hear much about this in the media, but if prices at the pump continue higher it could become a Q1 headwind for the consumer.  Gold prices are also higher near $1215.

Trading comment: Anyone who sold or shorted the market after the FOMC selloff is kicking themselves given how much the market has rallied since then.  We spoke about underinvested portfolio managers playing catch up into year end, and that likely helped push stocks higher.  But that trade is now long in the tooth, and for those who aren't under the gun of the calendar our bet is there is a better buying opportunity for most stocks after a pullback in the early part of 2014.  Timing is always tricky, but many stocks are extended at these levels and in need of some consolidation.