The market would sure love a "fiscal cliff" deal.
Equities were slightly higher Monday morning. After the story that House Speaker John Boehner proposed a counter-offer sent the market trading higher to 1422 on Sunday night's open, the S&P has put in a low of 1415, and is finding strong support above Fridays 1411.50 low. The market has been able to brush off negative news in the past few weeks, and this makes me believe a year-end rally is possible.
A close above 1424—Sunday night's high—will be bullish and should signal a trade higher through the rest of the week. A new low on Monday, and furthermore, a close below Friday's low, will be very negative and will put the market into neutral territory.
So what's the trade?
I am buying the S&P if the market closes above 1424, and if filled I will put in a stop-close-only order to give myself a ten-point sell stop against the position. I will look to take profits at 1440.
Good luck and good trading.
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