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We predicted the markets would run into resistance this week. We predicted we'd see volatility going into options expirations today. We predicted the media would spread fear on the possibility of a fiscal cliff deal not getting done soon enough. And more importantly, we predicted the world wouldn't end today. I wonder if there's a future in palm reading? No pun intended.

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Markets ran into some weakness yesterday at the close and is off modestly this morning as I type. All pretty logical since the NASDAQ Composite ran up into that key resistance level around 3049 we've been anticipating for quite some time, and finally confirmed Tuesday. As it stands right now, the indexes could use a little backing and filling to support the argument of going higher on any positive news surrounding the fiscal cliff issue. Although we do believe the media is making far more out of the issue than the markets actually care about, it would still, at the very least, provide a short-term catalyst for the markets to move higher. I say that because I think it's pretty safe to assume something is going to get done regarding the highly touted fiscal cliff, if not by the end of the year, more than likely shortly after the New Year. The key isn't whether or not the indexes sell off of a bit, but rather where they end up finding their footing.

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I understand the history and all of the successes of our government can be largely attributed to the well thought out concept of establishing a structure that allows for a system of checks and balances. However, it can often appear sometimes that many of us are played by the media and the rhetoric that comes from both sides of the aisle. Yes, we've got both sides working hard to resolve some important fiscal issues right now, but somebody needs to tell these people who are responsible for working on these issues that we're not interested in hearing about who is failing or who is not cooperating enough. We don't care which side you want to blame, or which side is going to get the credit. We just want to know that you're all working in the best interest of the people to get things done. If something doesn't get done, or if there are delays on why it's not getting done, we are really not interested in hearing about who is at fault, from either side. For once, it would be nice to see both sides shut their traps in front of the media and quit making their political agendas more important than the issues at hand.

I say this because I saw a headline this morning suggesting the White House is threatening to veto a particular plan when in fact, the only reason for the publicity is to continue to divide the people in this country for political reasons. Who really cares about that other than them? All we care about is having a great opportunity to have an economic environment we can all take care of our families and future under, right? I don't care who gets the credit and nor should they. Our children are smarter than these people sometimes. Since when does your child's youth sports team win a game, and your child stands up and takes all of the credit? It's a team effort. Be a team for God's sake. Enough already.

I do like the way the markets are behaving though. Although I mentioned yesterday we're up against a very logical resistance level, sometimes the strength of the market can buck everything that's logical. I've said this before and I will say it again. I believe this market, short-term pull back or not, is going higher in the months ahead. There's no other asset class for big money to generate a better return right now other than stocks. We all know what's been going on with bonds and other financial derivatives, so while much of the country continues to worry about the potential economic woes that lie ahead, big money investors are likely going to continue to flex their leverage and take this market higher.

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The markets continue their resilience this morning as the S&P 500 continues to lead the indexes higher, while the NASDAQ Composite has managed to climb enough to finally test its all-important 5/8 retracement level and breach the top end of the upper band we mentioned in yesterday's edition. All good signs as the worries over the fiscal cliff seem to have investors and traders thinking there was never a cliff in the first place. Another classic example of media mongering that has left many investors without the necessary technical tools out of the picture. It's important to always remember, the trend is your friend. If you've managed to play contrarian at every short-term scare in recent weeks, you're probably at the very least making enough money to buy your family just about everything on their wish list this Holiday Season. Santa has been known for decades to bring cheer to the markets around the Holidays, and it appears this year is no exception.

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Good Friday all. Depending on where you live, you're probably more accustomed to hurricanes and tornadoes, while we here in Southern California have gotten pretty used to the ground shaking. Early this morning, we had quite an eventful wake-up call in the Southland with a 6.3 earthquake off the coast of Baja that shook things up pretty good. If that wasn't enough, I was sitting watching TV last night and through the sky lights in my living room I kept seeing flashes out of the corner of my eye. Thought I was seeing things only to hear on the news this morning we had quite a nice meteor shower show last night as well. Nice. What the heck is going on?! I sure hope the Mayans weren't correct in their end of the world predictions. Maybe I should rethink how I spend my free time over the next week, eh?

All sarcasm aside, I'm fully confident we'll all wake up next Saturday morning to a nice hot cup of coffee and a hearty breakfast. Since we're approaching the end of the year, I thought we'd have a technical look today at how the markets have been shaping up on more of a long-term basis, and what we'll be looking for in the weeks and months ahead. I've also got a couple of very interesting ideas we've identified in recent days which continue to outperform the rest of the markets. Both of these ideas could likely be added to the low risk side of your long-term investing portfolios as safer plays in the event we start to see weakness surface in the weeks ahead.

Before we get into that though, from a short-term perspective the indexes are almost perfectly flat on the week as I type with the NASDAQ Composite literally one mere point lower right now than where it closed last Friday. We mentioned earlier in the week volatility was likely going to pick up and that's exactly what we've started seeing. I've included a couple of very small charts here of both the S&P 500 and the NASDAQ Composite isolating the last two weeks of trading. As you can see, the S&P has been the better performer, while the Composite simply appears to be wrestling with itself. A classic case of a dog chasing its tail for no apparent reason. The S&P has also been a better predictor in recent days of what these markets seem to want to do. This hasn't been the case for quite some time.