The bulls did an excellent job of building on yesterday's strength. Anticipation of a fiscal cliff deal continued to build and we saw a few other positives, including the upgrade of Greek debt and a weak dollar. Continued rotation out of bonds also looked to be another incremental positive factor that boosted the market today.
I'd prefer to discuss some other issues, but the only thing that matters right now is this fiscal cliff issue. If the negotiations fall apart, this market is going to become very ugly, very fast. However, we still have a few more days before we have to worry about it. If there is no deal by Friday, I expect to see some nerves set in but President Obama probably has his golf clubs packed and is expecting to hit the links in Hawaii next week. The politicians really would prefer to do a deal now, even if they put off some of the big issues.
I'm trying to stick with the upside momentum while I can and I don't see any major obstacles for another a day or two. It is going to boil down to "deal or no deal," and we shouldn't try to complicate it.
Have a good evening. I'll see you tomorrow.
