The Fiscal Cliff Runs the Show

We sit just a few points under the 50-day moving average for both the S&P and the Nasdaq as I write this. The market continues to be obsessed with the fiscal cliff. It seems like it doesn’t even require a statement from Obama, Reid, or Boehner to move the markets, a Congressional Page could probably post a Facebook status update and the Dow would shift by 100 points.

While reviewing yesterday’s price action I began to see some very small divergences as traders appear to be shifting a little more towards the defensive/low beta parts of the market, but this divergence is not enough to pound the table on the current short-term rally being over. A bounce to 1420  and the 50-day moving average has not been out of the question and is healthy. Until the fiscal cliff talks are ended, for better or worse, they control each day’s movement, this should be taken into consideration when evaluating a short-term view on the equity markets.

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+.

About Andrew Thrasher, CMT

Andrew Thrasher, CMT is a Portfolio Manager for Financial Enhancement Group, LLC, an asset management firm in Central Indiana and founder of Thrasher Analytics, an independent financial market research firm. He specializes in technical analysis as well as macro economic developments.

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