The number of high relative strength stocks that have been holding their breakouts over the past several sessions is a good sign that the market may be headed higher.

Friday's price action should favor market bulls, as the broad market consolidated near recent highs, in a tight range.

The S&P 500 and DJIA are within mere points of taking out their respective three-day highs. Follow-through from both of these indices could point to a sizeable move higher in the market.

In the wake of Tuesday's big advance and price action on Wednesday that was positive for bulls, a day of consolidation should be expected prior to the market attempting another move higher.

Three of the five major indices gapped up and held the gap on Tuesday, and a bullish follow-through day during the next several sessions could spark a big rally.

The fact that the S&P 500 and DJIA are hovering near breakout levels is promising for the long side of the market.

In the current light volume holiday action, the market continues to find it hard to establish an identity. It wouldn't be surprising to see the market languish once again on Friday.

In the absence of serious volume, Deron Wagner doesn't expect much follow-through in the market in either direction. Under current market conditions, he is inclined to cut losses and take profits quickly.

It is promising that all of the major indices are consolidating at the two-day high, but Deron Wagner would not be surprised to see choppy price action until after the New Year.

Institutional players were absent from the market on Friday, as is typical for a pre-holiday session.