Markets are off sharply today, amid rumors that no progress has been made on the fiscal cliff front. Harry Reid took the podium early this morning and his dire outlook sparked a sharp selloff. Since then, there have been numerous conflicting reports of a compromise deal being put in place. While that caused a slight bounce, markets currently sit near the lows of the day. All major indexes are down about 1% for the day, and the key 1400 level for the S&P 500 was already tested once. Bonds are firmly bid, up about 0.8%, while the VIX has spiked another 5%.
CHART OF THE DAY
Oracle Corp (ORCL) – The application software company has had a great 2012, up about about 30 percent since January. ORCL recently reported better-than-expected earnings, and the stock gapped significantly higher on 12/19. Since then, the shares have consolidated on low volume and have since filled that gap higher. Going forward, keep an eye on the 33 level, site of resistance from September, for potential support going forward. A move back to the 36 level seems like a good possibility, whereas a close below 32.50 would be a good sign to exit the position.
WHAT I’M EXPECTING
More rumors and volatile intraday ranges. Until there is some resolution to this fiscal dilemma, short-term scalps are really the only way to trade this environment. We briefly pulled back near 1400 on the S&P 500 today, so keep an eye on that level going forward. The first week of January should be very telling as to the market’s next significant move.