Market rally dampened by Fiscal cliff veto comments
The two day old rally came to halt and stock took a breather as the comments from White house regarding a veto threat on the GOP proposal dampened the enthusiasm. The market has shown similar behavior whenever something negative is spoken politically about fiscal cliff. Fiscal cliff does not mean that on January I, 2013 everything will drop into an abyss and the world will end. These are hard fiscal policies that will take effect if something is not resolved. Who knows what the effect of fiscal cliff would be down the road six months or a year and it may not even show up in the economy.
It has been a nice two day buying spree, and most major stocks gained several points. Today was a lackluster day as the early morning comments didn’t help the market direction. The SPX is on rising trend line since the November 16, 2011 bottom and has gained its 50 day moving average. This action does not negates previous actions and should be considered a healthy digestion or a breather.
AAPL gapped opened again to the downside and failed to break 525 levels as everyone was expecting it. The stock moved back up to 530 levels and than finished 526. The stock has lot more to prove and draw back investors as the volumes are thinning out. The volumes also drop during the Christmas season and that may continue till the end of the year.
This is the last full week of trading this year. Friday brings options expiration and a bullish bias in the market as it has in the past.
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