3:30 pm ET: Today's Obama meeting of congressional leaders resulted in some willingness by both parties to effect compromises regarding the fiscal cliff. These bipartisan overtures came as music to Wall Street's ears as evidenced by the abrupt mid-morning market turnaround following the Capitol Hill meeting. The high dividend paying issues (income funds, MLPs, REITs) that have been getting hammered recently stormed back with a vengeance with many of them completely erasing yesterday's dramatic sell-off.
With a half an hour before the close, the major averages are rallying but one has to wonder if some of this action isn't due in part to short-covering. No one wants to be short over the weekend and I'm not sure if anyone wants to be long, either, considering the rising tensions in the Middle East.
One of the few stock events worthy of note are the bottoming tails that have formed in the charts of Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG). What this shows is that the buyers are willing to step in at these levels, effectively putting the brakes on any further decline. Whether these bottoms hold remains to be seen but if you have short positions in either of these, you might want to cover them. From my point of view, I'd rather take a real profit than a potential loss.
Have a good weekend! Go UCLA--beat 'SC!!!
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