After 22 trading days so far this year the S&P 500 is up 6.94%. Anyone may have a bullish outlook or bearish one but right here right now the market is rallying and seems like it has a good head of steam behind it.

The market ended off the highs of the session, but with volume coming in lower we avoid a day of stalling. Russell 2000 small cap index raced higher tying the NASDAQ composite for the top index of the day. Interestingly, enough both indexes have yet to have the golden cross yet continue to lead the entire market higher. Bernanke’s testimony on the hill helped spark some buying, but as the testimony wore on sellers began to take over. We continue to play in overbought conditions, but this rally is healthy and remains that way. Tomorrow’s job report will certainly set off fireworks.

March S&P E-mini Futures: Today's day session range estimate is 1329-1343. The longer term trend is upward. A rally from the November 25 low at 1147.50 which matches the size of the October rally would bring the ES to 1370.

QQQ: Headed for 63.

TNX (ten year note yield): The 10 year yield has started a move to 2.50%.

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Quote of the day

David Swensen, “A fiduciary would offer low-volatility funds and encourage investors to stay the course,” he said. “But the for-profit mutual fund industry benefits by offering high-volatility funds.”  (Justin Fox)

Chart of the day

A reader asks;

The comment stream is asking you to elaborate as to that portion of your statement wherein you said owning 'dividend growers exclusively' is risky or not advisable...exactly what are the dangers of having an income stream as a primary goal instead of capital appreciation?

My answer;

The closing price of the S&P 500 on Dec.31 of 2010 was 1,257 - as of this morning, the SPX is again: 1,257, despite a volatile year. Something like 88 trading days have seen triple-digit swings YTD. Dividends anyone?
The last time the AAII Bull/Bear ratio was spread this wide (the Bears 20 points below the Bulls) was July 15 week. A week later the DJIA dropped 2,000 points. Two other favorite indicators of mine - the McClellan Oscillator and CBOE Equity put/call ratio - are also getting toppy; as is the Bullish %.

As the old saying goes (Observable, but not Actionable) : So goes the first week of January - so goes the month; so goes January, so goes the year! Of course, a la the Heisenberg principle - since the year contains the month, it has a nice running start.

One of the first ETFs for Latin America is the iShares is the iShares S&P Latin America 40 Index Fund (ILF). I am pretty sure that iShares Brazil (EWZ) and iShares Mexico (EWW) predate ILF going back to the WEBS days (WEBS=world equity baskets).

A few days ago iShares came out with a surprisingly similar Latam fund with its new MSCI Emerging Markets Latin America Index Fund (EEML). Obviously the index provider is different but the I can't imagine there is any real differentiation.

This week is traditionally the week for the Santa Claus rally and the Mother of all rallies (in his 40 years) that Tom Demark predicted (offset a couple weeks). Also notable are the technically high probability events ( recently negated by Fed intervention, etc.) are the January Effect of small cap stocks and CEF (closed-end funds), such as munis, that get sold off in December, only to rally in January - something that is observable if not actionable.