Despite the incessant flow of “fiscal cliff” news from all of the media outlets, stocks continue to hold their own. For the week, the Dow Jones Industrial Average (chart) closed up 1%, the S&P 500 (chart) + 0.13%, the Nasdaq (chart) -1.07% and the small-cap Russell 2000 (chart) finished the week flat. Not too shabby considering all of the fear and uncertainty surrounding the fiscal cliff and that Washington has not really progressed towards a deal.

With only a few weeks left in trading year and the fiscal cliff deadline, what is an investor or trader to do? Well if you are a trader you should love this type of environment. I am expecting volatility to pick up steam between now an year end. This should present larger market swings and provide excellent trading opportunities both on the long and short side. If you are an investor you may want to sit it out until we get a deal out of Washington. I remember the days when you would make investment or trading decisions based on fundamentals and technical analysis. Now seemingly the biggest factors are whether or not the central banks will continue to support the markets and whether or not Washington can get along. Needless to say, this dynamic has placed additional uncertainty on the markets and investors or traders now have to add this in the mix of their decision making processes. Good luck to all.

Have a great weekend 🙂

~George