Fund managers and investors alike are asking themselves whether the year-to-date highs for the SPDR S&P 500 ETF Trust(SPY) are in the past or whether a Santa Claus rally could push us to marginal higher highs.

While market breadth is about as weak as I have ever seen it by some measures, a glimpse at seasonal patterns and an understanding of investor mood/psychology at this time of year can give us some hints about what the path of least resistance may look like into year-end and early 2016.

Year-to-date, the S&P 500 is just about flat, which is to say that the August/September weakness has now just about fully recovered itself. If flat is the new up, then investors have succeeded in saving the 2015 stock market … but really only the S&P 500 and a couple of other broader indices.

Market breadth as looked at through the lens of stocks trading above various standard moving averages or stocks trading at 52-week highs is plain awful. In other words, a big part of why indices like the S&P 500 or the Nasdaq are trading near their highs is due to their market-cap-weighted calculation.

If large-cap and thus more heavily weighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) or Alphabet Inc (NASDAQ:GOOGL) rally, as they have this year, they can push these indices higher despite a large amount of other index component stocks trading lower.

Read my full analysis HERE

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