Fiscal Cliff Plan "B" Sentiment Indicator

One thing you've heard very little about here is the "Fiscal Cliff", I'm pretty sure that every other source of news on the markets has been nothing but the "Fiscal Cliff", for example, "The market did XYZ because of the Fiscal Cliff today".

The masses ALWAYS want to know why the market did what it did and there's no end to the media sources as well as Wall Street sources that are more the happy to tell you why the market did what it did.

The truth is (because we have seen it sooo many times), in most cases the market is doing what it is doing because it already set that play up, in other words the market is a LOT LESS reactionary than people think and MUCH MORE forward thinking and planning. We wouldn't be able to predict moves like we have been doing if the information wasn't already there and the information was there long before any kind of reaction to the Fiscal Cliff took place.

The point simply is, the truth about the markets, how and why they move is much too complicated for the average CNBC viewer and a simple reason as to why the market did this that or the other is about all most people can digest or care to digest.

However today I will say that this is one of those days in which things look muddy, we have VERY clear signals like before the IWM breakout and before the QQQ breakout where we know what to expect and how to play it, then there are brief moments in which the market gets muddy in the short term (mostly short term) and it is in those moments that I believe the market is not operating so much on forward planning, but is truly worried about a fundamental event that the market has no way to discount.

For instance, Boehner's Plan "B" vote in the House which I believe is scheduled for today after market, although I've seen conflicting reports.

No matter how much inside information Wall Street has, they just can't poll all the members of Congress and find out how this vote will go, how Obama may react to it, how the Senate may react to it (although that seems much more certain) and whether Boehner can keep his own party on the same page-remember the Tea Party is very independent from "Republicans" on certain matters and this is one of them.

I can't tell you what the market may be worried about, but the muddiness I'm seeing does seem to reflect some worry about a fundamental event that they can't discount because it hasn't occurred yet and they don't have inside information to know how it will turn out.

That's my guess for the time and we have seen this before (usually in front of some major EU conference or election), as always we don't guess, we wait for the market to give us a clear signal in underlying trade, which often contradicts current price movement.

I'll let you know as this develops, but this is my initial take on how the market is developing today, of course we have other events such as Op-ex tomorrow and end of year window dressing which could cause some insane volatility.

We also are nearing the last days of trade for the year, remember the T+3 settlement rule, so the last day of trade for hedge funds and others trying to clean up their prospectuses is not the last trading day of the year, they have the 3 day settlement rule so it's before that-I haven't sat down with a calendar yet and figured out when that is, but I will.

I'm going to be looking at everything, lading indicators, sectors, bellwether stocks, TICK, breadth, etc as we can usually find some hint somewhere that is right on like volatility on the F_O_M_C QE3 day that told us  which way the market was going before the announcement and then told us to look for an intraday reversal, exceptional signals.

So I am here, I'm just going to look at about 200 different assets in the next 2 hours.

As for AAPL Puts, I'm sticking with them, but I do expect some intraday upside soon.