Cliff Rally

Cliff Rally

sales_negotiation

The market had quite a rally last week – didn’t it?  It actually started the prior Friday on the 16th of November, near 1340.00 in the ES. 

What happened?  John Boehner held a press conference about the “fiscal cliff” negotiations in which he suggested that said negotiations were going well.  Naturally, Fraud Street took this to mean that the massive deficit-can would be kicked into next year yet again, when we will go through this all over.

A week later the ES traded 67.00 points higher in the post-Thanksgiving Day trade.  Surely in this week there was even more “negotiations” that were “going well” – right?  Not so much.

Sunday we read from Reuters that the nothing is happening. Is anyone really surprised?

Nov 25 (Reuters) - U.S. lawmakers have made little progress in the last 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for Jan. 1, a senior Democratic senator said on Sunday. 

The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a "fiscal cliff," could easily trigger a recession.

"Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess ... much progress hasn't been made," Dick Durbin, the No. 2 Senate Democrat, told ABC's "This Week" program.

A deadline is looming. Absent action by lawmakers and President Barack Obama, roughly $600 billion in tax increases and spending cuts will start to hit households and companies in early January.

Republicans and Obama's Democrats are at an impasse over the president's wish to raise income tax rates on the wealthiest Americans, which Republicans say would hurt job creation.

Republicans also want to cut spending on social programs more than Democrats say they will accept.

Durbin said Democrats are willing to allow small changes to parts of these entitlement programs, including public health insurance programs for the elderly and poor, but the Social Security government pension program should not be on the table.

"Bring entitlement reform into the conversation. Social Security, set (it) aside," Durbin said.

The possibility of a deal – with NO DETAILS – was good for 67-handles in the S&P500. 

Will the reality of no progress remove the fraud rally? LOL!!!!  Yeaaahhhh, right.

Trade well and follow the trend, not the so-called “experts.” 

Behold the age of infinite moral hazard! On April 2nd, 2009 CONgress forced FASB to suspend rule 157 in favor of deceitful accounting for the TBTF banking mafia.

Value Areas:

ES 1405.00 / 1396.00 

POC… 1401.00 

YM 12950 / 12884 

NQ 2634.00 / 2617.00

Best Trades to you,
Larry Levin
Founder & President- Trading Advantage
TradingAdvantageCom