Aside from no new higher high yet on any major index, the other issue at this moment is the slope of the 50 day moving averages for all the indexes which are still downward rather than upward. It will of course take quite a bit of work to get that to flip in the other direction. In the meantime after this morning's gap up, the S&P 500 was rejected on its first attempt to puncture the 50 day moving average. This came just as some person from Congress said on MSNBC "still far apart" on fiscal cliff. It's going to be a very annoying month ahead as politician after politician is paraded in front of microphones.
On another topic this morning we had a revision to Q3 GDP. There was a massive increase in government expenditure for the quarter. Any surprise this came right before national elections as first pass of Q3 GDP was announced days ahead of the election? Hah – even the Chinese are taking notes.
On a more broad note the government has funded a lot of economic activity since 2009. This is why the U.S. has looked brighter than many countries which have been trying "austerity". Whatever your believe about austerity in the long run, it is not fun for an economy in the short run. So any form of tax increase (i.e. the payroll tax cut holiday going away) or spending cut that is not done a decade from now will hurt the economy in 2013; both in personal spending and corporate profits – both of which have been supported by federal government largesse.
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