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Get ready for a fantastic December: Trader

Trader: December will be a great month for stocks

I'm betting that the market will close higher on New Year's, and here's why.

First of all, for all the fretting about how stocks may have become over-extended, the market's fantastic uptrend is still intact. This rally has been a three-year story, and the story doesn't seem to be over just yet.

(Read more: Good news: Bubble concern is at 5-year high)

In addition, there's a strong seasonal wind at traders' sails in December. Over the past 31 years, if you bought the March e-mini S&P contract on Dec. 1 and sold it on Jan. 17, you would have had 26 winners and five losers, for a conversion rate of 84 percent.

This is no mere coincidence. After all, in December, fund managers simply don't have to get out of the market. They get paid on performance, and they're just going to let the market drift higher into the end of the year. Why rock the boat, especially after such a successful 11 months?

For all these reasons, I'm expecting that December will be a sweet month for stocks.

(Read more: Markets will come 'unhinged' if this happens: BofA)

Yet that being said, the market is destined to top at some point. The high will be a process, not a price, and that process could be starting now. For that reason, I am holding some S&P puts at a lower level to give me some security. If the market does get dicey, it will be handy to have a bit of protection.

By Rich Ilczyszyn, special to CNBC.com. Ilczyszyn is founder and CEO of iiTrader. Follow him on Twitter @iiTrader.

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