By Peter Switzer, Switzer Super Report

In December, I always try to work out if a Santa Claus rally is in train for the festive season. History is on our side but the question is: has Christmas come early with the Fed boss-in-waiting, Janet Yellen, inside the Santa suit?

Regular readers know I've been pondering where the overdue correction is. The likes of WAM's Geoff Wilson thinks a correction or pullback is way late and Roger Montgomery says he can't find any value. But I have consistently argued that I just can't find an economic trigger for a stock price slide and so it would have to be an unseen X-factor that might knock market confidence for a six.

Yellen's present

Charlie Aitken is in an onwards and upwards mode, since Yellen uttered these words last week: "I consider it imperative that we do what we can to promote a strong recovery." Yellen said when replying to a question at the Senate Banking Committee hearing last week. "It's important not to remove support, especially when the recovery is fragile and tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero."

In simple terms, she said she won't risk hurting the US recovery, where economic growth came in at 2.8% for the third quarter. This was better than the 2.5% expected by the experts. And by the way, the US long-term average growth since 1947 is 3.2%, so it was a promising result.

Yellen's position rings sweetly for market players, just like Mario Draghi's famous "whatever it takes" promise last year, which helped the European economic recovery and underpinned the strong stock market performance we've seen since the middle of 2012.

So if Santa has come early, is the general Christmas rally over, or is Yellen's gift the gift that keeps on giving?

There is a market view building that as QE3 tapering won't happen this year (it will probably come in March or even later), then it's game on for a predictable Santa Claus rally.

The technical guys say the Dow is in a bullish ascending triangle pattern, which is another plus for stocks. Market bear Jesse Colombo came up with this interesting take, following his recognising of the triangle in Forbes.com: "How am I able to be a longer-term bear and a tactical bull at the same time? It's very simple: inflating bubbles lead to shorter-term market gains, until they pop and cause a crisis, and the current US stock market bubble is no different. At the end of the day, it's important to realise that much of this bull market, including this week's Yellen-induced breakout, is driven by Fed monetary stimulus rather than a genuine, organic economic recovery."

So a pop will come, probably when tapering starts.

Who's the scrooge?

Could there be any other Grinch that could steal Christmas? Try the Tea Party.

On December 13th ? a Friday! ? the House Budgetary Committee in the USA has to come up with a new plan for the deficit and debt reduction.

Time magazine says "Democrats want to replace the across-the-board budget cuts known as the sequester, which will chop $109 billion off the top of nearly all defence and non-defence programs in 2014, with a mix of targeted spending cuts and tax revenue generated through closing some tax deductions." The Republicans want tax cuts to be on the agenda and the Tea Party wants bigger conservative reforms, which could cause another impasse that could spook stock markets.

However, I think this will be a minor issue pre-Christmas. With President Obama in trouble over his healthcare reforms, which could mean 15 million Americans will lose their healthcare coverage, when he said it couldn't happen under Obamacare, the Tea Party can't afford to act stupidly to discredit the Republican Party.

And it comes as Tea Party candidates are being dumped by voters around America.

The party is over

A special CNBC report showed business interests are tired of the madhatters in the Tea Party. The report revealed: "In Alabama on November 5, Republican Bradley Byrne beat Tea Party favourite Dean Young for a US House seat in part because the business community rallied around him. In Virginia, Democrat Terry McAuliffe bested Tea Party-backed Republican Ken Cuccinelli, partially because some conservative business donors wouldn't give to the GOP (Republican) campaign ? or even switched sides. And in New Jersey, moderate Republican Chris Christie crushed Tea Party candidate Seth Grossman in the primary, and then Democrat Barbara Buono in the general election because of strong business support."

If the Republicans come through the next Congressional negotiations with no government shutdown and no threat to the debt ceiling that could, in turn, threaten a US debt default, then their stocks could be strong for the mid-term elections next year in November. Currently, there is talk that Obama could end up being a lame duck president for his last two years because he is losing popularity.

Given all this, I'm prepared to start stuffing the stocking with stocks every time there's a dip or when a small cap with potential comes along, which, of course, the Switzer Super Report is always on the lookout for.