Maybe you recall the old Wall Street adage, "When the cat's away the mice will play." This saying was adopted to explain the unusually quiet market action seemingly experienced during the run-up to most major U.S. holidays.

The saying suggests that investors might do well to pretty much forget what happens in the stock market during these brief, light volume trading days.

Ahhh, but wait a minute. Last week's Thanksgiving Day trading was anything but light, at least as I count light. Monday's volume at the NYSE was just a bit over 2 billion shares.

In fact, it was the second largest volume day since Aug. 20! The largest volume since Aug. 20 was Nov. 8 at 2.3 billion shares. Doesn't sound like a light trading day to me.

On Tuesday, Aug. 21, trading was again very healthy, at 1.7 billion, ranking as the No. 10 highest volume day since Aug. 20. And that, too, doesn't strike me as a light trading pre-holiday day. It's plain that there just aren't any mice with pockets deep enough to finance volume like we saw this pre-Thanksgiving week.

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What gives here? And why is it important to Thanksgiving 2007? Simple. The word out over the weekend was that the fat cats were staying put this year. That explained the unusually high volume prior to the Thanksgiving Day festivities, they said.

It was said that this Thanksgiving period was really a most unusual one, what with the deep worries about the subprime problem, the threat that Middle Eastern countries are about to buy America for their financial playground (wasn't that Japan's role 25 years ago?), and that we are about to see a devastating second round of unknown financial problems that will seize up the markets, bring on a deep recession (some even use the "D" word), and end the world's economic life as we know it today. This pre-holiday truly was different, they said.

But, truth be told, the old adage really just doesn't hold up. Even if you look back for five years, you find the three days prior to Thanksgiving in each year averaged nearly 1.4 to 1.5 billion shares for each year since 2003. Hardly light trading days.

What I am trying to point out here is that last week was not different. And the world is not about to retreat into the Stone Age. We are a sturdy and inventive race, we humans. Granted, sometimes we get a bit off base and need to reconnoiter, but problems are made to solve and solve them we do. When a problem is recognized, we have awesome resources to bring to bear to solve it.

So, let's back off just a bit and see what the real world is telling us - the world where real people buy real stocks, putting real money where their true, real beliefs are.

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First, it is clear that our world is awash in prosperity, despite dire rumors and predictions of just the opposite.

Investors have driven stock markets around the world to new heights believed impossible just five years ago - remember the low of Dow 7,416 on March 11, 2003?

Further, this species has continued to conquer crime, terrorism, disease, and a host of other problems in the last five years, a marvel to even the most jaded onlooker.

But, let me turn to my trusty charts for the rest of my comments today. After all, that's the turf where I feel most comfortable - and confident.

Here is what I see: Market action the last four to five trading sessions is fulfilling the predictions I made here just a few weeks ago when I said that a near-term event was approaching that would shape the market's activities for many months to come.

You can read the full text in my article of Oct. 16, when I said, in essence, that we were approaching this key event in market direction soon. (It now appears that "soon" may be in the next two to four weeks, though at the time I felt it might be more like two to three months.)

The event I speak of is a throwing in of the towel by either the bulls or the bears, an abandonment of their most fervent, deep down conviction about the direction the market is about to go. More bluntly, one side or the other is about to get beat-up - big time!

First, I am including a chart (the S&P 500, my favorite choice for a clearer picture) of the market since January this year so you can get a close look, and a second chart to look at the last five years, to give you that longer perspective - always look at the larger picture, as every successful general knows.

The short-term chart shows that we have been in a trading range of S&P 1390 to 1400 low and S&P 1550 to 1560 high (the Dow numbers would roughly be Dow 12,700 low to Dow 14,150 high).

Counting the low in late February as the first low, we have touched the top of this range twice and the bottom of this range three times, this week being the fifth touch, and the third touch of the bottom.

In my 40-plus years in this business, I have very seldom seen more than four to five touches within a trading range without some "resolution" of such a trading range, or a break up or down out of the range. ("Very seldom" means that I can probably count on one hand the number of times it has taken six touches or more before a resolution).

One thing I might point out on this 2007 chart is that the important lines of overhead resistance on the S&P are still above us at about the 1515 to 1520 area, note the red area on the chart. We will likely encounter some choppy work when we get there, as the S&P attempts to touch the top of this trading range at 1550 to 1560 again. So, be prepared for that event, too.

Now let's look at the five-year chart. A quick glance clearly puts all the longer-term action in more perspective. From a low of S&P 789 on March 14, 2003 to a high of S&P 1576 on Oct.12, 2007, this stock market of ours has risen a staggering 100 percent in just five years!

Astounding is the only word I have for such a move. Only the historic move of 1995 to 2000 exceeds this performance, and that one began from a far, far lower base.

Now, as one might expect, we are seeing a test of this huge gain. Note that in each year since 2003 there has been at least one test of my Super Chart Keyline, but never a break below the keyline.

The test in 2006, the most severe of the five-year period, is much like this current test, except that the range from late 2005 to the low in July 2006 only gave us, at best, three touches of that range, one top touch, and two bottom ones.

The fourth touch (the second touch to the top) just broke right out of the top of the range and never looked back for a year and over 300-plus S&P points (over Dow 3,000-plus points)!

If there is any difference with today's trading range, it is the fact that we have now had five touches within the range. To me, that means we are on the very threshold of the resolution of this trading range.

So far, despite all the efforts of the bears, we remain above the Super Chart Keyline, a fact not lost on me. And, while the Dow violated its keyline to the downside last week, the S&P is at this writing (Nov. 28) nearly 60 points above its keyline.

If you look in my archive file, last week I showed you why the Dow chart is not as reliable as the S&P in calling the cross down/up of the keyline, an event that completes a Major Market Turnaround (the name I give a violation of the keyline).

In the situation today, I thus ignore the Dow cross-down and look only for a cross-down of the S&P keyline, which would end the current bull market that began in June 2003. And yes, I am always apprehensive when we get this close to the keyline, I must confess. But, I always let the keyline tell me what it is saying. I learned long ago never to tell it what it is saying.

So, all that said, I stand my ground that this test will eventually resolve to the upside. If that were to change, I will let you know.

How about purchasing stocks? I would be a buyer of stocks that are well priced - P/E of less than 12, above its 200-day moving average and near the bottom of its current trading range started early this year.

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Keep away from hot stocks, high P/E stocks, and stocks that have just made new highs or have been knocked below their highs of January this year. If the Super Chart Keyline holds, we will look back and see we made some great buys 12 months from now.

And what if the keyline doesn't hold? Well, if that were to happen, as I said, I will advise you to clear out your portfolio, except of good long-term dividend payers and defense issues.

Yes, there may be some losses in the stocks you buy now. But, that is what the stock market is all about - taking commensurate risk to make a potentially good profit. If you want riskless trading, buy Treasury bonds. But, you already knew that, didn't you?

Well, that's the skinny for this week. I believe this is truly a period that will be looked back on in years to come as very crucial to the markets. You can just feel everyone moving as if they are walking on pins and needles.

Just look at the bond markets to see how nervous traders are. Huge amounts of money are driving bond prices right through the roof! Investors are buying bonds as a place to "park" money until the outcome of this battle is more clearly known. They sense the time is near! Wow! Do I ever love this business!

So, for this week, I hope your coming investing week is a good one. In the meantime, you keep in touch. I do! See you next week.

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