Now that the U.S. federal budget has been settled, and the Federal Reserve has begun the taper, the issue for traders is how much of a "relief rally" might be combined with the traditional "Santa Claus rally."
One thing's for sure: technical indicators are very strong. The major indices are at historic highs, just over some nice, round numbers (Dow above 16,000, S&P 500 above 1,800, and the Nasdaq comfortably above 4,000). There was a HUGE jump in volume (30 percent above average at the NYSE, highest since September), and 5 to 1 advancing to declining stocks at the NYSE.
And there will be even bigger volume tomorrow...in fact, it could be the heaviest volume day of the year.