Santa Rally Lifts Indices to Unprecedented Heights

Starting with the indices, we’re witnessing a remarkable rally that has pushed them to all-time highs. The anticipated Santa Rally has certainly delivered more than expected, leading to an overwhelming bullish sentiment in the stock market. However, this level of optimism often heralds the possibility of a bearish correction lurking around the corner. For the time being, though, the buoyant mood prevails and the upward march continues.

Shifting focus to the forex market, we're seeing a stronger Japanese Yen and New Zealand Dollar, while the Euro is on a downtrend today. Yesterday marked a significant correction for the Japanese Yen and the US Dollar, with the New Zealand Dollar and Australian Dollar emerging as the strongest currencies.

In terms of economic data, yesterday's highlight was Canada’s higher-than-expected inflation rate, which spurred some gains for the Canadian Dollar. Today, the spotlight shifts to the UK with the release of its inflation numbers, expected to show a decrease to 4.3%. Additionally, the US Consumer Confidence Index, anticipated at 104.6, will be closely watched by traders.

Lastly, let’s look at commodities. Gold appears to be on an upward trajectory, and oil is also inching higher, potentially leveraging the double bottom or inverse head and shoulders pattern. However, both are still below their respective mid-term downtrend lines, indicating that reaching these lines might offer a favorable opportunity for short positions.