So looking at individual stock charts, I see nothing pretty in the financials, retailers, or transportation sectors. Can staples, energy, utilities, and tech carry the load? They are going to in order for us to make new highs come 1Q 2008. Take a look at any beverage, food, or drug stock. Good odds that they are consolidating for a move upward. If you want to play the beaten down ones, at least buy write them to take in some income. You may have to wait a while to get some good traction in those suckers.
I made some sales at 1522 SPX and am fully loaded again at 1455. Look for a quick rally from these levels into 1490-1515, then a pause. Come January expiration, we should be ready to rally out of a flag into 1550 territory.
See Barry Ritholtz's Big Picture for some great economic insights, especially the negative real interest rate discussion. With all of this central bank liquidity flooding the system, it will keep a floor underneath financial assets for a while.