More and more signs of an imminent fiscal cliff deal is buoying this market. The hedgies don't want to miss out on the fiscal cliff deal rally, so they are putting a bid underneath this market. The question is, will retail come in to buy the pop off the deal or just stay away? More importantly, will the johnny come lately hedgies pile in on the long side after the deal? No, on both. After getting burned chasing the market after it popped on QE3, they are going to be reluctant to chase it again here. Once bitten, twice shy. I am betting that the fiscal cliff rally will be even fleeter than the QE3 pop. The market lingered near the highs for a few weeks, this time, I doubt we'll make it past a week on this deal pop. The market is always forward looking, and earnings will not be far away in mid January, and most will not want to be too long ahead of that.
We should have low volatility trading till the deal comes out, and then you will see size sellers come out of the woods.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment