The Cliff

Despite no agreement on the fiscal cliff talks, the market seems totally unperturbed, apart from a brief wobble in the early hours of Friday morning. With this total lack of progress we fail to see how a 'grand bargain' can be struck, in all likelihood the best outcome will be another fudge and the worst a total collapse. Either way we see profit-taking into the year end and will hold our small short position. We will  short another 2 contracts on a rally above 1450, and set the stop for all 5 contracts at 1463. We will also take profits on any fall below 1410.