The final trading day of the year has not been very friendly to investors with the S&P 500 showing losses in 6 of the past 7 years. However, the first couple of trading days of the year have been very strong outweighing the final day of the year.
We have an overbought reading but the market has the potential to get more overbought in the coming days. Looking at the 10 day moving average of the advance-decline line we could get more overbought through Wednesday. Looking at the 10 day moving average of the put/call ratio, we could get more overbought through Tuesday.
A strong move early next week would have us overbought and looking at more neutral seasonality. That would likely be a decent place to pare back some exposure.