Cautious Floating

Yesterday afternoon’s selloff in stocks was prompted by Senate Majority Leader Harry Reid’s comments that Fiscal Cliff talks were not making progress.  That selloff continued this morning with the Dow and  S&P 500 both lower by over 1% at one point.  However, they have since snapped back to even after Speaker of the House John Boehner made positive comments, giving investors hope that the fiscal cliff will be avoided.  Get ready for a highly competitive game of political badminton with the bi-partisan talks that will continue today.  This will certainly add volatility to the market finish through the end of this year.  Mortgage bonds are still grinding their way higher, and that is helping keep rates within range of the all time lows.  We will continue with a cautious floating bias.