FREDAlert!
Volume 5, Issue 1
January 2, 2013
Downlaod PDF Version here
We had several calls and emails on stocks and the “Fiscal Cliff” so we put out some quick observations.
First, as we mentioned in the 12/31 Weekly Review: the market became oversold in ADVANCE of the resolution of the cliff and not BECAUSE of it. And, in our opinion, the rally Monday was a response to that oversold condition rather than any sort of “cliff” deal. Look at the daily stochastic on SPX in the aforementioned Weekly Review to see this.
Second: as of this writing it does not seem as if this “fix” is much more than a patch, and there seems to be little if anything that is a surprise in the legislation. But folks more qualified than I will make that evaluation today and in the days that follow.
Third: the initial reaction to a widely anticipated occurrence such as this “resolution” is often wrong. We would not make big commitments to the market on the gap open of futures, but would let dust settle.
Fourth: AAPL is rallying per our discussion in the Weekly Review on 12/24/12. Objectives are 580 or so, and we will discuss on Thursday’s call.
