there might be a knee jerk market reaction and given low volumes, a pop might be seen, but for most part, the market have been baking in a deal already...I would expect any pop to be sold into. In fact, if fiscal cliff deal wasn't expected, this market should be a lot lower as the unemployment expect to go much higher and GDP revised downwards by quite a lot....that isn't the case now at all. And what exactly does a fiscal deal mean? it means how much spending will be cut and higher taxes likely...how is that really beneficial to markets? except that the uncertainty is removed.
I think it(resolution of fiscal cliff) will come in one to two weeks--Sunday before Christmas. Wall Street needs to panic the market into selling off so their prop desks can load up. Just my opinion, but that opinion will be reinforced if we get a decent selloff in the market over the next two weeks. If it does, I'm loading up on call options on the general market.
Do you mean the risk is not being in the markets or not being in FCX? The broad markets had a good afternoon. Especially the last hour when they really took off. The Dow and S&P essentially closed at their highs of the day. FCX on the other hand went nowhere this afternoon despite the markets tailwind. Every attempted rally was convincingly sold back down. Just look at the volume today vs a normal Friday afternoon. The big sellers are not done with FCX yet and it looks like a number of shorts already got squeezed out this morning. All we really did today was fill the gap between Wednesday and Thursday. Nice to have a green day but IMO it could be a bit yet before we start filling the real gap.
Embrace the cliff. It is the best deal for people seeking greater fairness in taxes and who want to see real spending cuts. The market will probably drop since the consequences of the cliff have been so hyped, but it will recover once people think about what is really going on.