“More on the fiscal cliff talks: The President’s opening bid – delivered this afternoon by Tim Geithner – calls for a $1.6T tax increase, a $50B economic-stimulus program, and delivering to the WH the power to raise the federal debt limit without congressional approval. It’s a “step backward,” says Mitch McConnell. It sounds more like what it’s described as: An opening bid.”
1. SPX is right at resistance at 1419 and has a next level of strong resistance just above;
2. After hours Pelosi , unintelligibly, appeared to say no cuts as “we already cut $1T in spending during the year”. absurd;
3. Synopsis of reports tonight: there have been no negotiations, just Dems saying raise taxes now and we’ll look into cuts later, but no cuts or even discussions on Medicare or Social Security and by the way, we need an extra $50B stimulus right away… McConnell reportedly laughed out loud at Geithner when he “offered” this “deal” from Obama, as noted above;
4. The VIV remains low, near 15.
My take? We dive down to SPX 1400 at open and either bounce or it does not hold. If holds, I buy the dip, if does not I am a SELLER. So far, Futures only down .25% So far, with some volatility, the market is shrugging off the kabuki theater… because there is still time. This is what the VIX tells us.. but at some point that may turn into panic. I do not believe we see a deal until Christmas, or a few day before… IF AT ALL.
Patrick Hoog~ http://www.investortradestockspreview.com
My take: Patrick’s comments above hit the nail on the head. Indecision from our leaders, the holiday season and the SPX at a key level of do or die for the next few weeks. The VXX ETF is making year lows daily as the markets chop between ranges under very little buying or selling commitments. So December is cash hording in my opinion. Better to be safe than stuck in a grinding, political mess. Being over-weighted either side can make you feel like a trapped dog with no real control. I look at this month as one big giant option expiring on the markets/cliff events with too much premium in the prices. We all know what happens to lofty premiums as time decays ! A great comment from Steve at HFTAlert was..” Traders can affect price moves but they don’t affect the main trend–portfolio managers do”.