Market Drops as Fiscal Cliff Progress Hits a Wall

The outlook on the fiscal cliff took a turn for the worst as House Republicans failed to vote on Speaker John Boehner's  Plan B for the budget. This took the market by surprise: the knee-jerk reaction was to sell. The reality is that President Obama was going to veto it anyway.

The market technically remains in an uptrend. However, that could change if we don't get a resolution soon. 

It seems that the President and the Democrats are content to go over the Fiscal Cliff. By going over the cliff they would get the tax increases they want on the so called millionaires and billionaires by letting the Bush tax cuts expire. Then in January they would possibly introduce legislation to reduce taxes on middle class tax payers. 

I think it ultimately would be political suicide for our elected officials to drive us into a Washington created recession.  I am sure there will be a resolution, but one by the end of the year now seems much less likely. In the mean time we will probably suffer through some wild swings in market.