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With the S&P 500 gapping up to new record highs during Friday’s shortened session, our indicators have now turned bullish following five weeks of bearish readings. The internals of the market, including the ratio of advancing stocks to declining stocks, have improved, and we are also entering the period between Thanksgiving and Christmas, which has historically been bullish for the market.

From a bearish perspective, one of the things we may start to see before the end of the year is a lot of tax-loss selling. While the market has been rising steadily this year, not all stocks have been participating, and those that have been the weakest are likely to see further selling into the end of December as investors offload their lagging positions for tax purposes.

Frankly, the only stocks I really want to be in on the long side are those that have been ripping to the upside, such as some of the semiconductor stocks. With that in mind, I’m respecting the bullish state of my indicators with calls on Cypress Semiconductor Corporation (NASDAQ: CY).

Buy to open the CY Jan (2018) 18 Calls (CY180119C00018000) at $0.45 or lower.

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