The Santa Rally seems to be back on track but before you bulls partake of the punch, you should note a few things:

1. While the VIX (volatility index) has fallen, it's still in bear territory (above 15). A few more up days, though, could send it back below the bull/bear dividing line.

2. While the small-cap Russell 2000 (RUT) did manage to close the day at a new high, the other major averages lost steam at the end of the day and couldn't pull-off the same miracle. The Dow Transports (DTX) couldn't even best 900, a major level of support/resistance. Its chart is still stuck in a downward trending channel--definitely not a bullish sign.

3. The positive and negative VWAPs have been seesawing back and forth. This is behavior that can arise from a number of factors including (but not limited to) sector rotation, rising investor jitters, or a polarization in investment outlook into bull/bear camps. But whatever the cause, this seesawing has to be rectified before a market direction can be predicted with any degree of confidence.

The good news for the bulls, though, is that the week before Christmas and running up until the New Year has traditionally been a great time to be long stocks. If volatility wasn't so high, I'd recommend buying call options especially on index tracking stocks but this time you might just want to either sell puts or just buy the stock itself.

One area that could be in the beginning stages of a turn-around is the hotel/casino industry. The Gaming etf (BJK, $39.91) has been sliding ever since notching its all-time high of $56 in early March. The downward trend was halted two days ago. It's unclear as yet whether this is the start of a whole new bull run or just a relief rally. Individual names to watch in this area are Las Vegas Sands (LVS, $56.44) and Wynn Resorts (WYNN, $150.11).

Oil bounced nicely today and although there was a lot of buying in this space, much of it could just be short-covering before the holiday. If you're just dying to get in here, at least be prudent about it as many oil analysts think that recovery in this sector isn't likely to occur until at least the second quarter of 2015.