Sunday, December 30, 2012
Yes I do work on weekends
Yes, I do work on the Sunday before New Years Eve. The markets are already open in the Far East and it is not encouraging. The S&P 500 stands at 1385 within 10 points of a major support level of 1375, see above, I have written about the 1375 level on several occasions. The Dow Jones is of 225 points or about 1.75%. This continued sell off is because of the concern about the ability of the Congress to deal with the “Cliff” issue.
The markets could swing widely over night depending upon the outcome of any vote in the US Congress. The first hurdle is the Senate who may take up the house passed bill and make some amendments. The House will have to vote on Monday in favor of a compromise with the Senate.
If you wake up on Monday morning before the markets are open in the United States and you see the S&P 500 at 1385 or lower the congress failed.
We have cash, and as I was talking to a new client on Friday I said we might have a great buying opportunity. There is an old saying on Wall Street, “You buy when there is blood in the streets.” We will know how much blood will flow in the next few days.