Clearly the market wants the fiscal cliff resolved and in a way that doesn’t destroy or seriously hurt the economy.  Today was proof.  President Obama and House Speaker Boehner’s 45 minute meeting generated a solid market advance in excess of 1%, despite a horrid Empire State Manufacturing index release.  The days remaining until “the cliff” are dwindling fast.

Santa Claus is trying his hardest to keep spirits bright among stock investors. But the President and the House are not playing nice and just might find a lump of coal in their stockings. Neither appears willing to give an inch, so some observers predict that we will indeed go over the fiscal cliff, at least until mid-January.

We will definitely face more of the same this week as we have the past week.  There seems to be some progress between the President and Congress, but it’s anybody’s guess what combination of increased revenue and reduced expenses will survive political battle.  It will probably be some combination of increased taxes on the top 2% of our wealthiest citizens and some reduction in medical spending.  Who knows what else?  More on that later.

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I am not going to mention the nickname for the dominant issue of the day, since you are probably on the verge of screaming if you here it again (hint: initials are F.C.). But, unfortunately, we all remain hostage to the relentless political posturing of our elected officials during these critical budget negotiations. Not that we haven’t asked for it.

Scott Brown, President of Sabrient Systems, will be live on the Business News Network at 1:30 pm PT to reveal Sabrient's top stock picks. http://www.bnn.ca/shows/the-close.aspx

Today was an inauspicious start to December.  Based on positive pre-opening behavior from Europe, including a number of positive PMI’s (purchasing manager indices), as well as a positive November PMI of 52.8 from our own economy (up from 51.0 in October), our domestic markets opened up about 0.5%.

The news has been dominated by the predictable on-and-off speculation about progress with Europe’s intractable debt crisis and the Fiscal Cliff here at home. With all the economic uncertainty, Wall Street analysts are struggling with their forward estimates for companies. Stocks have fluctuated accordingly, testing support and seeking catalysts.

The S&P 500 held once again at the 1350 level, and a “Rush to Risk” ended the shortened week at 1409, up more than 3% for nearly all indices and sectors. Where do we go now?

The market surprised us this morning with a strong performance. It could be supported by confidence in Housing, as existing sales were better-than-expected and downright positive (stay tuned for more numbers from housing sector tomorrow). Or it could be a technical move off of support at 1343 for S&P 500, which would be nice if the market recognized at healthy 10% sell-off and is now moving forward.