Headwinds for the bull case

I called for a Santa Claus rally in late November (see Waiting for a Santa Claus rally) and equity markets cooperated and prices have moved up strongly since then. Now that Santa Claus has come and gone and we have seen the "fiscal cliff" relief rally, what's next? Technically, there are a lot of reasons for stocks to at least pause at these levels. The SPX is now testing an important resistance level. More comforting for the bulls is the broader NYSE Composite has managed to stage an upside breakout through resistance, indicating that the underlying strength is broad and deep. However, I don't expect that the SPX will break through to new highs in the short run for several reasons. Simply put, this bull is getting tired and this latest up move is facing too many headwinds. First of all, the SPY to TLT ratio as a measure of the risk-on/risk-off trade is also testing a rela...