IWM
Dow
SP'daily5
Trans
Summary
A day where the market jumped in the opening hour, and largely flat lined the rest of the day. Yet, the bears can be understandably very disheartened at this second rally day. We're now just 1.5% from breaking new highs - at least on the SP', and the bull maniacs are preparing to pull out their sp'2000 hats for 2013/14.
Fiscal delusion
It is remarkable that the market is comfortably holding in the 1400s, despite the looming crisis. It is indeed very much like July 2011. Now, I'm not yet claiming we're going to go collapse to sp'1200 (although that would remain the natural doomster target), but Mr Market has a real problem to address.
If the fiscal cliff measures are not largely delayed, there is a potential hit to GDP of somewhere between 2 and 4%.
Now, if you consider the very likely possibility that Q3 growth will be barely positive (data- Oct'26), then are we looking at a doomster outcome of Q1 2013 GDP of -5% ?
Regardless of the trading opportunities that will doubtless be there in the months ahead, I most certainly look forward to seeing how the market, and indeed the cheer leading maniacs on the clown network TV are going to cope if things do indeed..fall off a cliff. I imagine most of them will need to be put on suicide watch, not least if the SP' breaks secondary rising support - currently in the sp'1350s
Bullish popcorn...or in my case...chocolate.