Things are going to plan so far, but the FTSE has run into resistance just above 5900 and, according to the technical chart, is also in overbought territory (relative strength – AKA momentum – over 80) so I wouldn’t be surprised to see a small dip shortly. This should enable it to take a run up at the resistance level and break through.
The Dow is also looking overbought (though not as much as the FTSE) and has just crossed over the 50 day moving average, so it could be due a dip too. Fiscal cliff negotiations are seemingly stalled, though that is not necessarily too serious as the problem is nowhere near as precipitous as the moniker suggests. The Republicans are calling for smaller government and it wouldn’t surprise me to see the President giving them what they want by holding out into the new year. This would probably be to his advantage as he could portray them as being the unreasonable party if they continue to refuse to give ground on tax rises.
