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Dow stares down 18K on last big data day of 2014

Year-end buying could be the tail wind that pushes the Dow to 18,000, a psychological level that could give any Santa rally more steam.

"Trends all of a sudden reversed, and investors believe now that low oil prices are good and that could push stocks even higher," said Jack Ablin, CIO at BMO Private Bank. "It's more of a retail number. I suppose Dow 18,000 would certainly get people's attention. When you're closing a year on a high like that, that makes an important statement."

Barring any surprises or weakness in the economic data, stocks could continue to ride higher Tuesday. The S&P 500 closed at its 50th new high of the year Monday, up 7 points at 2,078, and the Dow was also at a record, rising 154 to 17,959. Oil, meanwhile, sank, losing more than 3 percent Monday on OPEC comments that production would remain the same, regardless of price.

Tuesday is the last big data day of the year. Durable goods for November and the third read of third-quarter GDP are expected at 8:30 a.m. ET. Consumer sentiment for December is at 9:55 a.m. New-home sales and key personal income and spending data, including the prices index watched by the Fed, are released at 10 a.m. ET.

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Ablin said he is holding off on capital gains selling until early next year, and others may be doing the same as stocks float higher into year-end. "It could be the first week that's soft as people push their capital gains selling into next year, and who knows when the next group of people are buying the dips," he said.

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Ablin said the market is also getting pricey.

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"It's an expensive market and it's going to get more expensive. I would like to see revenues really start to ramp up," he said. "It's a puzzle. I would say we're the attractive market. Everyone wants to be in the U.S. It's hard to judge when that flow is going to stop. Right now our price to sales (for the S&P 500) is 1.75, 1.8. ... History shows that it's impossible to make money in the market when the price to sales goes over 2. The last time it was above 2 was 1999."

There's also a 1 p.m. Treasury auction of $35 billion five-year notes.

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George Goncalves, head of interest rate strategy at Nomura, said the auction should go well. "The five-year and seven-year (Wednesday) will probably do well. The five-year is a sweet spot for banks doing last-minute Treasury shopping for the year," he said.