Here is an hourly chart of day session e-mini trading. There are two quite unusual feature visible. First, the market has been trading in roughly a 30 point range for nearly four weeks now. This is an unusually long time for a narrow trading range like this. Secondly, it seems that the only people with convictions about U.S. stock prices live in Europe and the far east. Witness the fact that virtually all of the up and down swings occurred primarily while pit trading was closed in Chicago - hence the many gaps visible on this chart.
What does it all mean? My working hypothesis is that U.S. based traders and money managers have had a good year. And they don't want to muck up their results for 2009 after they put in such bad results in 2008. They are probably waiting for 2010 to dawn before getting aggressive again.
But this is only a guess on my part. Looking only at the market's action during the past few days I see that the move up from this week's low at 1080 has been a low volume, low activity affair. The past two days have been especially dull. This to me has a bearish implication, but I don't yet see any reason to act on such implications given my basically bullish expectations for 2010.
So I will continue to try to be long this rally unless and until I see a high volume downside breakout from the past two days' ranges. In particular I still think that the market will emerge from the 4 week range on the upside before it breaks below its lower limits.