4:50 pm ET: Stocks rose a bit today as Speaker Boehner and President Obama both extended olive branches in terms of tackling the fiscal cliff. Whether this is just rhetoric remains to be seen but let's hope they'll put aside bipartisan differences and formulate a viable plan before the end of the year. Should it become apparent that progress is indeed being made, we could very well enjoy another Santa rally.
It was nice not to have to end the week on a low note but it appears that today's rally was but a respite in the latest downtrend. The Dow Transport index (DTX), considered the leader in market direction, chalked up another day in the loss column bucking the trend of the other major averages. Whether this continued slide will turn the other averages around on Monday remains to be seen but if the mid-morning rebound in the VIX is any indication, I would bet on it.
Other than the DTX and the VIX portending further downside, there wasn't much worthy of note other than the consumer discretionary etf (NYSEARCA:XLY) which broke $45.50 support. This is a bit worrisome considering that we're going into the holiday season. Should this be an indication that consumers are tightening their purse strings, current retail projections for holiday sales could be overstated which doesn't bode well for the bottom line. The stocks of many retail names have already started to sag and if margins this holiday season get squeezed, expect more downside action. If you hold any retail names, you may wish to buy some put protection (at least several month's worth) on either the stock itself or on the retail etf (NYSEARCA:XRT).
That's pretty much it for now. Enjoy your weekend!
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