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S&P 500 hits highs of session on speculation fiscal cliff deal may be ready

President Obama will make a statement on fiscal cliff negotiations at 1:30 pm ET. In anticipation of what traders believe will be a resolution to the fiscal cliff, the index is now sitting at the highs of the day, last at 1416.19. Resistance is at 1418.10 and then at 1422.80. Support is at the round number of 1400. The reaction at 1:30 pm ET or earlier if there is news before the speech could be quite outsized. If the news is positive, there could be a substantial rally in thin market conditions, presuming that a market-friendly tax increase compromise has been reached. An announcement that talks are stalled, or with details on tax increases that is less market-friendly than hoped for by traders could provoke an equally strong downside. Levels on both resistance and support noted above could be easily violated on either a better than expected outcome or a disappointment.