My review of the markets is weighed heavily by the belief that liquidity should become less and less as we moved through December. Here in the U.S., this is really a three-day trading week as Friday’s half-day is usually on very light volume.

Yours truly shall be taking a vacation from December 10th to January 3rd.

U.S. Stock Market – The “Don’t Worry, Be Happy” crowd on Wall Street would very much like to get their greatest fable into full gear – the Santa Claus rally. Unfortunately, a few silly matters they would like us to consider unimportant, like the financial crisis in Europe and the coming debt disaster here in the U.S., has caused a flight delay of Santa’s ride over Wall & Broad.

But with “Gobble, Gobble” day near, I suspect the “happy” people and their favorite landing place for Santa’s reindeers, CNBC-TV, shall help accomplish their yearly feat (albeit somewhat subdued) starting today.

The 50-Day M.A. is holding (for now). And while the “happy days are here again” sentiment has yet to be fully worked-off, we’re oversold very near-term. I suspect we shall see a “turkeys can fly” (but don’t ask Les Nessman) attitude for the balance of the week.

Gold and Silver – Some unanticipated near-term technical damage has been done. And while the decreasing liquidity through years-end can exaggerate any moves, the longer term picture remains as bright as ever.

U.S. Dollar – You would think with the Euro apparently disintegrating and the only real money (gold) under pressure, good old Uncle Sam could manage to at least get above it’s fairly tight trading range. Again, while lack of liquidity can lead to such a feat, I would look to short the terminally-ill dollar if it got much above 81-82 on the U.S. Dollar Index.

U.S. Bonds – Death, taxes and actual losses over the next ten years to anyone who purchases a 10-year Treasury bond today are sure things in my book.

Oil and Natural Gas – Oil did briefly get above my target of $100. 2012 could see an historic military fight in the Middle East. $100 oil could be cheap if such an event occurs. Stay tuned.

Natural gas is building a very long base in its infant bull market stage. Unfortunately, most natural gas stocks are overpriced in my eyes.

Mining and Exploration Shares – Look for continuing tax-loss selling right up to the last days of December. I’ve an increasingly long list of attractive companies I hope Santa can bring me for Christmas. I shall make it known in the coming days.