Folks, recently we talked about Washington bickering amongst themselves and how it would NOT be tolerated by the market. Yesterday Harry Reid had this to say:
HARRY REID SAYS `LITTLE PROGRESS' MADE RECENTLY IN FISCAL CLIFF TALKS. DISAPPOINTED WITH LITTLE PROGRESS IN DEBT TALKS
And away we went to the downside. The cliff actually is nothing. It is but it isn't compared to?
42 TRILLION (That's with a capital T folks) in unfunded medicare liabilities. 20 TRILLION in unfunded government pensions, 20 TRILLION in Social Security unfunded liabilities.And they want to bicker about a tax hike on the rich that over ten years amounts to one lousy year of deficit spending?What about the other 9 years.
And how about Social Security! This is SUPPOSED to be money set aside in a trust fund for we the people. If that money is set aside for we the people then how come there is an unfunded liability there. Where's our money? Ohhhh I forgot we the people entrusted then with it and they squandered errrrr SPENT it. How can any of us be "Hip" with that. This is OUR money, our retirements. Trust me the chickens are going to come home to roost at some point, in the meantime the fox continues to raid the hen house, our hen house that is.
See those TRILLIONS? Those are HUGE HUGE numbers. See why I said the cliff is nothing? Nuff said.
Moving back on to point, later in the morning today Boerner said he's positive they can reach a deal. And here we are filling the opening gap. What is interesting about all of this is that its funny how when we are at a key turn point that something comes out and sets the wheels in motion. We saw that yesterday at multiple resistance levels. This morning after the opening volley carry forward we got the flip side out of Boerner which just so happened to allow the markets to fill the opening gap. In other words the market technicals are matching up with he said then he said out of Washington. We'll see if this is going to be a repeat of June 2011 where every market move hinged upon what was said or wasn't said. All of which makes for volatile markets that can be used to ones OPPORTUNISTIC advantage.
We now return you to our regularly scheduled programming which is we are pulling back. The true extent of that pullback is yet to be seen but currently I see no reason to change our stance and that is to continue to prune long-side positions and build short positions. Next up? More bickering.
F we are indeed headed lower to some sort of retracement of the low from a week or so ago? Then yesterday's highs ought to stick baring a retest back to the scene of yesterday's crime highs that is. Which as I post may be occurring currently.
Nasdaq remains under 200 ma with a down-sloping 50 ma.
Not a good sign for bulls even with today's reversal off lows.
Game plan for the coming week
What we'll be doing here is taking it one step at a time one stock at a time. With the markets at a lot of resistance we want to continue to prune some long positions and start to take probing "Be There" short sells.
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