Like a bunch of Pavlovian dogs, the market has conditioned us to sell first and ask questions later whenever we see politicians in the spotlight trying to negotiate a significant bipartisan deal (e.g, the debt ceiling in the summer of 2011). Recently, we have seen intraday volatility each time one of the top politicians from either party appears before a camera or issues a statement regarding the “Fiscal Cliff.”
The issue now becomes whether the ubiquitous bearish sentiment towards Washington and all things political is too obvious to persist, solely with respect to the stock market’s price action. In other words, selling the Fiscal Cliff messy negotiation process may very well be too obvious of a strategy to work this time
More on my video market recap after the bell…
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