Avoid Shorts Right Now

 | Dec 13, 2012 | 4:21 PM EST  | Comments
  • Comment
  • Print Print
  • Print

A news blurb around 3:30 p.m. EST that President Obama and Speaker Boehner will meet today at 5 p.m. provided a good illustration of how the only thing that matters in this market right now is the fiscal cliff. It had been a dreary session on a number of pessimistic comments about the negotiations, but news of the meeting brought in buyers quickly.

The big problem for the bears is that until we actually hit the deadline, there is the potential for a fiscal cliff-deal at any time. You can't be comfortable with shorts because a headline about a meeting is enough to cut the intraday losses in half. If there's news of actual progress, it's likely to cause a downright frenzy.

On the other hand, the upside is not without substantial risk. If the bulls' optimism proves wrong and the fiscal-cliff debate drags on past Christmas, this market is going to become very rocky, very quickly. What further complicates matters is that the strength has been tepid and lacks buyable momentum. Stocks are holding and drifting upward. but it isn't a rally marked by big accumulation.

The bulls are hoping that President Obama has his golf clubs packed and is eager to make a deal so he can leave for his vacation in Hawaii. All the politicians want to leave, and they are going to push hard to get this done. We'll have a problem if it drags out for another week, but in the near term, the potential for a positive surprise is high enough that I wouldn't touch a short right now.

I don't think we'll see a deal tonight, but we will have some clues as to whether any progress is being made.

Have a good evening. I'll see you tomorrow.

Columnist Conversations

I'll have a pre-holiday webinar today filled talking about the recent market events, the first half of the yea...
Our indices closed at the midpoint or so of todays trading range as we go into the last trading day of this we...
I'm not sure Twitter will find its legs until they get a new CEO but I think Periscope alone is worth $10 bill...
The energy sector(OIH -3.5%)is limping into the close. The big equipment names like SLB, BHI, NOV and HAL...



News Breaks

Powered by

Columnist Tweets


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.