(December 31, 2012)
Last week the stock market pulled back on rising worries over the fiscal cliff. Today stocks delivered a widespread bounce as congress rushed to cobble together a last-minute deal. No deal has been finalized and that means the rest of the week could be very volatile. If we don't see a solid deal by Wednesday morning then Monday's gains could vanish.
All of the uncertainty surrounding a fiscal cliff deal does not generate confidence to launch new long-term positions. News of a deal could send stocks soaring and word that the deal has fallen through could send stocks plunging. On the other hand we could actually see a spike higher on news of a deal only to see the rally reverse and investors sell the news. There is no way to know what direction the markets are headed. Therefore I am not adding any new positions tonight.
I did add a few new candidates to the radar screen. Some of them look like potential plays right now but I would not launch positions given the uncertain future of the fiscal cliff.
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself:
LULU, DDD, XLF, ETN, DE, CLB, BAC, RJF, MS, GS, SCHW, PHM, RYL, MHO, HP, APKT, CDE, X, RS, CMI,