So, of course market is going up on fiscal cliff deal back to where we were in mid December when it was assumed that the deal would happen, and then we sold off in late December on fears that it wouldn't.
So far this morning people are selling into the gap up, but not real heavy selling. You can see it if you look at an intraday chart for say AAPL. They gapped it up and sold the gap and continued to sell. I think we have a little bit of a grace period here where they'll take the market up in the first couple of weeks of January. The European markets closed with good gains today, so why shouldn't we, given that Europe didn't even have the fiscal cliff worries that we had.
I think the market runs into a little trouble prior to 4th quarter earnings beginning to come out around say Jan. 20th. Then I think it runs into trouble in late February when we begin to worry again about some of the elements of the fiscal cliff again, like the debt ceiling and other other details that still need to be worked out. If people get a sense that both earnings estimates going forward for the market are too high, AND there is some fiscal cliff worries, the market could get a decent (like 5% plus selloff). For now though I think you go with the strength for the next 2 weeks and then see how things look.
It looks like today the buyers are trying to figure out where to start buying after this big gap up. With NE, I've noticed it didn't sell off much with the market, and we're also coming into the strong season for Oil stock performance so if you do sell you risk not catching the seasonal rally. If NE continues to rally, I will lighten up going into earnings later in the month.