As recently as Tuesday, I thought news of a Janet Yellen appointment for Federal Reserve chair would go a long way toward reversing stock market weakness. But though President Obama is due to nominate Yellen for the Fed chairmanship on Wednesday, it seems the market has already priced in the news.
It's also possible that, although the market views Yellen as dovish, we realize that she's only slightly more dovish than the current chairman. In other words, all in is all in. Given Ben Bernanke's accommodative policies, how much more dovish could a reasonable Fed chair get?
(Read more: Confirmation seen for 'feisty lady' Yellen)
Still, the small bounce in stocks is disappointing, and underscores the deeper concern over a dysfunctional government. The weak close on Tuesday caused me to abandon my hopes for a significant move higher. The last hope we have is for a bargain in Washington, and at this point, that seems unlikely until the end of the month. So making a short-term bullish bet on stocks just seems a bit silly.
So how am I trading the market now?
I am looking to sell a small pop in the S&P E-mini December futures at 1,662, with a downside objective of 1,625. A trade up to 1,687 would stop me out.