1) home builders: oversold. Home builders are up big today and have gone a long way to repairing the damage in the last week. The stocks are dramatically oversold, and the worries about them are perhaps a bit oversold as well. To wit: worries about reducing or eliminating the mortgage interest deduction and FHA insolvency.
(Read more: How to Trade the 'Fiscal Cliff' Drama If No Deal Is Reached)
Eliminating the deduction on second homes would certainly hurt areas with a big second-home market, but those areas are relatively small (Florida, coastal Carolinas). For primary homes, reducing the mortgage interest deduction (allowing a deduction of only, say, the first $500,000 of a mortgage) may put some pressure on higher priced homes, but these are primarily in New York, California and Massachusets.
2) dividend payers (utilities, REITs, closed-end funds, telecom, some closed-end funds) are stabilizing today. In particular, closed end funds which trade at premiums or discounts to their underlying investments have been hit hard this week. The largest, the PowerShares CEF Income Portfolio is a fund of closed end funds, dropped nearly 8 percent in a couple days but has since rebounded.
(Read more: 'Fiscal Cliff'—America's Looming Economic Crisis)
—By CNBC's Bob Pisani
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