Traders have moved on past bad earnings, on to something perhaps worse. The fiscal cliff. The elections next week will be a nonevent unless somehow Romney wins, which will be a short squeezer. In any case, the fiscal cliff will be the big worry after the elections and should create a volatile market.
This year has been the least volatile since 2006. It has sucked the life out of ES trading. My theory about volatility is as follows: markets are the most volatile around bottoms. Markets are the least volatile in the stage leading up to the formation of a top, not at the top. When forming a top and ending a bull market, the volatility rises before the downtrend. Just based on the low volatility of this year, this bull market probably has another 6 months to 1 year left in it.
We haven't had a rally in ages it seems. We finally got one today. The rally
should not last for long and is a sell opportunity. I expect weakness
tomorrow.
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