Danger, or opportunity? The S&P chart below titillates us with plenty both. We see a rally that has spent the last month in coil-and-lunge mode, fitfully making its way toward the year’s earlier peaks. Having surpassed one of them already – the 1233 high recorded on October 3 -- the index has eased slightly, presumably to begin staging for a dramatic, mediagenic thrust to new recovery highs.

(Click on chart to enlarge)

But don’t assume the bulls will be able to accomplish this by themselves. They have about as much enthusiasm for buying stocks up to unfamiliar heights as you or I do for trading up to a bigger SUV. No, it will take the panic-inspired buying of bears caught in the ringer to rouse stocks from their year-long stupor.

So far, those betting the “Don’t” line show no sign that they are ready to take the bait. Overbought indicators are starting to roll down, hinting that shorts who remain patient may get the chance to cover at much better prices. Or will they? Very powerful rallies are often launched from overbought extremes. For our part, we won’t try to second-guess Wall Street’s holiday finale – just the tradable swings. Lately, their rhythms have been very friendly toward our hidden pivots, if not quite cuddly.