Short-term trend (DAILY CHART) – BULLISH: SPX rallied strongly last week, rising from 4415 to 4514, a 99-point rally. That's three weeks of rallies after the huge October selloff. Right now, SPX is well above all three major moving averages. Because of the holidays, it should be a low-volume, low-volatility week. Note: Futures are FLAT on Monday morning.

Long-term trend (WEEKLY CHART) – BULLISH: SPX is strongly above all three major moving averages and still pointing higher.

MACD (DAILY) = BULLISH. For the first time in months, MACD broke above both the zero line and the 9-day signal line. Up, up, and away!

RSI: (S&P 500) = 69.10 (DAILY) EXTREMELY OVERBOUGHT. After a three-week rally, no one should be surprised that the indexes are extremely overbought. Don't bet against the market yet because overbought markets can get more overbought. However, SPX and the other indexes have an appointment with reality at a time and date of its choosing.

Comment: It's a shortened week so I will keep my comments brief. Basically, as expected, the market rallied so hard it is now overbought, and could get more overbought. In the near future, the market will reverse direction (but no one knows when). A lot of money managers are counting on a Merry Christmas, and so far, the market has obliged.