Sen. Harry Reid just made it very clear that we are going over the fiscal cliff. In his typical unhelpful style, he made sure to blame Speaker John Boehner and said that there was no bill forthcoming in the Senate. The only real chance of a deal is if the Senate could pass something, but that isn't going to happen now.
The big question is how the market will handle this news. We have been living on hope for some sort of deal, although there has been increased nervousness the past few days. Will market players continue to provide bids while waiting for the politicians to start acting like adults?
Selling is picking up as the market starts to understand that the fiscal cliff is the next step. I have a few long positions but I am heavily in cash and not doing much. I did start a position this morning in St. Joe Co. (JOE), which is a play on Florida real estate development. I also added biotechnology stock Santarus (SNTS), which has recent insider buying.
There is no reason to buy now as chances for a short-term deal appear remote.