Major U.S. stock indexes and ETFs finished strongly in the green today as President Obama and House Speaker Boehner met at the White House and appear to be moving towards a deal to resolve the fiscal cliff issue.
For the day, the Dow Jones Industrial Average (NYSEARCA:DIA) rose 0.76%, the S&P 500 (NYSEARCA:SPY) added 1.19%, the Nasdaq 100 (NYSEARCA:QQQ) gained 1.38% and the Russell 2000 (NYSEARCA:IWM) climbed 1.37%.
Gold (NYSEARCA:GLD) was mostly flat at $1699/oz. and oil (NYSEARCA:USO) gained 1.4% to $87.98/bbl.
More news regarding the fiscal cliff is expected as the week continues and Speaker Boehner meets with Republican colleagues on Tuesday to discuss the situation. Congressman Boehner offered higher tax rates on incomes greater than $1 million over the weekend and apparently sweetened the deal with an offer of a one year increase for the debt ceiling.
Economic news remained weak with the Empire State manufacturing index remaining in contractionary territory for the fifth straight month with a reading of -8.1, widely missing a forecast gain of 1.0 and below last month’s -5.2.
Although the recent rally in major U.S. indexes and ETFs has garnered positive headlines, nothing much has happened from a technical point of view.
The Nasdaq 100 (NYSEARCA:QQQ) remains below its 50 and 200 day moving averages and has painted a “death cross” in which the 50 is below the 200.
The trading range is easy to see in the chart above as resistance lies just overhead at the 1430-1440 level and support along the trend line at 1400-1415. Until this range is broken, either up or down, nothing much is really going on in major U.S. stock indexes.
Bottom line: U.S. stocks and ETFs continue to reflect hopes for a deal on the fiscal cliff while locked in a relatively tight trading range that has been underway since early November. As the Holidays approach, we can expect low volumes and headline induced volatility along with moves generated by the fiscal cliff discussion. Separating noise from significant market motion will be important as 2012 draws to a close.