Today we are waiting for the payroll report which comes with high expectations.
Yesterday the market moved up on higher volume. The attached chart shows the most recent IBD Market School portfolio exposure model. The exposure count is +4 meaning a maximum exposure of 90% long. The action of the leading stocks in my opinion probably warrants a lower exposure. Leading stocks just haven't gotten much traction. Still the NASDAQ moving above the 200-day is a good sign. You can see that it did this in October for a few days and then failed. The 200-day is the sign post for the market to take the high road or the low road.

The NASDAQ is not the leading index right now. The DOW and DOW Transports are performing much better. Until a major index breaks above the May 2011 high the major head and shoulders patterns are active and could point to the low road eventually taking hold. It is easy to imagine how this might come about. Fixing a sovereign debt problem with more debt has never worked in the past. I am reminded almost daily something I believe a UK politician said: Every politican knows what needs to be done, they just don't know how to get reelected if they do it.

0NDQC_20120105.pdf