And now the BKX finds itself right in that 118 target zone I had calculated.

I calculated the 118 target by using the swing from trend line A to B. Remember, we take the high of the pattern, then subtract the low (115 - 111 = 4) and add the difference to the breakout (114 + 4 = 118). (See chart below.)

However, if we want to calculate another higher target, we can take the swing from trend line B and get a target of 122. (Those calculations: 114 - 104 = 10, then 10 + 112 = 122.)

I bring this up today for a few reasons. First, the banks were on a tear yesterday as the bonds were collapsing. Second, the regional (read: small) banks have exploded to the upside in the past few days.

I have not seen the media make a huge fuss over any of the bank stocks yet, except for Citigroup (C - commentary - Cramer's Take). But I suspect with the moves we've seen in the small banks, it won't be long before the bank theme catches fire.

Maybe there is a deal coming, and that's what will get attention, or maybe it's just the banks' turn to rally. However, as the BKX heads into this 118-122 area, I expect we'll see these stocks gather media attention -- too much attention -- and they'll promptly go into a correction.

As for the ratio, it has done very well since I first showed it to you in early December. It is now nearing its first resistance zone in the 84% area. I suspect the media will get excited about the banks just as the BKX reaches the target of 118-122 and the ratio gets toward resistance. That's about when a correction in the banks should set in!

For the market as a whole, breadth was excellent yesterday (that's those banks hard at work!), and volume was pathetic. The put/call ratio was a bit low, so we shouldn't be surprised if we give back some gains in the next day or so. That would be the choppy side of the market. However, we are still oversold, and I continue to expect an upward tilt in the market going into the first week of January.

A reader asked me to show the chart of the 30-day moving average of the advance-decline line. Despite the excellent breadth readings of this fall, this chart actually peaked on Sept. 1. It has stayed pretty much in a tight range since then, but it is well below its recent highs. This is one reason why I believe the current Santa Claus rally won't last beyond the first week of January.