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The Standard and Poors 500 Index (SPX) opened this shortened holiday week at 3226 and closed Friday at 3240, up about 0.4% for the week. Monday, Tuesday and Friday were typical for a holiday week, with largely sideways trading. Exchanges closed early on Tuesday and were closed Wednesday. But SPX traded strongly higher as the market reopened on Thursday. Friday’s trading was subdued and trading volume was significantly below average all week.

Traders are increasingly optimistic about the passage of the Mexico/Canada trade agreement and the proposed trade agreement with China. The bulls have been released and they are going all in. Apple (AAPL) is a good example, trading up 12% just in December. Apple’s stock price has been subject to some volatility as the trade negotiations with China seemed to spurt forward, stall, and then resume.

The volatility index for the S&P 500 options, VIX, has been running around 12% for the past two weeks. VIX dropped below 12% intraday on Thursday and Friday, but could not hold those lows and closed Friday at 13.4%. The small rise on Friday betrays some residual concern on the part of large institutional traders. The prevailing concern appears to be whether the market has run too high and too quickly. Traders may be hedging portfolios.

IWM, the ETF based on the Russell 2000 group of companies, pulled back a bit on Friday, closing at 166, down 0.8 on the day. This appears to be a magnification of the broad market indices trading a little more weakly on Friday. The Russell 2000 serves as a measure of the degree of “risk on” or “risk off” for the large institutional traders.

The bulls drove the NASDAQ Composite index higher on Thursday, but surrendered about half of those gains on Friday, closing at 9007, down 16 points on the day, but up 0.6% for the week. Trading volume on NASDAQ came in below the 50 day moving average (dma) every day this week.

It would be a mistake to read too much into the market’s trends based on a week shortened by one and a half days of trading and extremely low trading volume on the days the market was open. It is probably safe to expect the bulls to continue to push higher into next week, but the big question mark will be whether the so-called Santa Claus rally ends with the year or continues into January. Historically, the first five days of trading in January provide a pretty reliable prediction for the year’s market. But the November elections may throw a wrench into the works.

I am bullish, but I also remain cautious. The trends in VIX are instructive. It is reasonably low, but not too low. The large institutional traders are watching carefully. Retail traders like us would be well advised to do the same.