A slight afternoon bounce took the market off the midday lows but it wasn't enough to push it into the green. Again, it was flat action with little volatility. A few names like Netflix (NFLX), Green Mountain Coffee (GMCR), Edwards Lifesciences (EW), Big Lots (BIG) and First Solar (FSLR) were chased, but most were extended and that didn't make for easy entries if you weren't already in.
I've been complaining lately about how few opportunities there are in this market and, unfortunately, it looks like that is likely to continue. It is pinned down by this fiscal cliff debate and that is not going to go away for a while. On one hand, the market is optimistic that a deal will eventually be made but on the other hand, no one really believes there is going to be a real solution.
I'm hearing more concern among traders that a fiscal cliff deal may not be the catalyst for a major market ramp. The high level of market optimism about a fiscal cliff deal may actually create a sell-the-news setup. It is premature to worry about that now, but the more the market acts as if a fiscal cliff deal will solve all problems, the more concerned I am that the opposite may occur.
For now, I'm going to stay in very short-term trading mode and I have no plans to carry much inventory. It isn't my preferred method of trading, but in the current environment, I see few other viable alternatives. This is the time to grind out the trades rather than go for the home run.
Have a good evening. I'll see you tomorrow.