The market is getting a little frothy in the very short term and its possible that we see a dip in the early to middle part of December. In the intermediate term sentiment is nowhere near extreme and we are still in the seasonally strongest few months of the year. While I have used strength to trim some positions and wrote covered calls against others I am maintaining a medium to moderately net long posture. I prefer to give the market the benefit of the doubt during this time of year.
A few companies have announced special dividends for the latter part of December. If this trend picks up and an abnormally large amount of dividends are paid out in late December it could give the market a lift as some investors reinvest these dividends. The ideal setup would be for us to see a correction into mid December, all the while many more special dividends are announced. That would make for an excellent risk/reward long setup.