Still Hoping

The market is weakening, and waiting for a fiscal cliff deal, any deal, even a small one.  The market is like Gerry Cooney, the Great White Hope.  It sort of reminds me of the debt ceiling deadline in August of 2011, when nervousness about a deal weakened the market, with Boehner in the middle of it, just like this time.  Well, we got the deal then, and made it by the deadline, and got a 1% gap up that was faded right from the opening bell, leading to a huge selloff of course not because of debt ceiling nerves, but because there was another lurking disaster that no one was paying attention to: the European debt crisis.

Well, this time, we've got everyone focused on the fiscal cliff, but ignoring the coming Q1 earnings in January which are not far away, and they will be bad again.  Slowing earnings and an economy that will be lacking much of fiscal stimulus will be on its own.  Expect this coming January to be unlike the past two.  I am expecting sharp selling that will take us back down to 1340 to retest that low we made on November 16.  And if that low scares the Fast Money crowd, then it will be a buying opportunity.  But now is a time to look for spots to sell, the VIX has already made its move higher, it is now time for the market to make its move lower, probably after a deal is done.