Markets opened higher this morning and then climbed a bit higher around noon and didn't give any of it back as the afternoon wore on. SPX gained $10 to close at $1254 and RUT gained $5 to close at $746. SPX is nearing significant resistance at $1260 - $1270 with the 200 dma at $1259. That will be a critical level to monitor. VIX dropped again today, closing at 21.2%, seeming to suggest that most traders have accepted that Santa has arrived. Trading volume dropped at 2.7 billion shares of the S&P 500. Trading volume dropped 12% on the NYSE and 19% on NASDAQ.

Several media sources highlighted the drop in initial unemployment claims to 364k, just four thousand less than last week - I suppose we are desperate for good news. Continuing unemployment claims dropped from 3.63 million to 3.55M. Third quarter GDP grew 1.8% and the University of Michigan consumer sentiment indicator rose slightly from 67.7 to 69.9.

I will be watching SPX as it tries to break out above the 200 dma tomorrow; if it manages to close above $1260, I may believe in Santa Claus after all.