It doesn't matter. If there is a deal there will be spending cuts, no deal will have spending cuts and taxes rise across the board. Im thinking S&P 1500 tops which is roughly 5% higher, the downside risk is 20% correction. I'll take those odds all day long. Better to be short for me, however, I'm viewing this tade as a long term trade. In the near term its 50/50. The S&P traded in a very tight range, for any bullish indicator I could equally show you a bearish short term indicator. Right now, the direction is 50/50 on a short term basis only. Good Luck!
Short has always been a tenuous position in a market driven by $Ben's fiat dollars. This "rally"
is very narrowly-centered on a few darlings that have stayed relatively-high, and are now getting squeezed up once again. That would seem to explain Y the squeeze-ups on the indexes lately have been rather attenuated? The NASDAQ is a laggard because of the AAPL exodus.
For now, my bet is that we melt-up (long on SSO) and NOC JAN13 CALLs. I may add DDM (long the DOW). CAT, my most profitable short, and the DOWs punching bag, is now getting squeezed up.
It'll make a great short when things turn south again.
There's no selling-pressure seen anywhere, except virtual elevator shafts down, like FCX. Looking at a long there. Should be good for a couple of bucks by Jan13.