Just as the major market indexes were about to violate their psychologically important milestones, that is 13,000 for the Dow and 1,400 for the S&P 500, news broke that there will be another fiscal cliff meeting forthcoming, as the House told their members to show up for work Sunday night at 6:30 pm.

That’s all it took, and one look at the above chart tells the story as to the exact moment the desperately needed assist was thrown. While the S&P 500 still ended up slightly in the red, it could have been a lot worse as the indexes were down by over 1%, but thanks to the last hour lift-a-thon, the inevitable was postponed again.

I for one can’t wait to see if this will be another face saving attempt supported by useless jawboning or if there is some seriousness to this upcoming Sunday night drama. I still believe that it will take a major setback in the markets, say in the range of 20%, which eventually will force the hands of the politicians to reacquaint themselves with the meaning of the word ‘compromise.’

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Fears about the looming fiscal cliff are taking on a new dimension as there is exactly one week left for the President and Congress to come together and avoid the mandatory spending cuts and tax increases.

On extremely low trading volume, the equity indexes gave up ground for the second day in a row during today’s shortened session. Despite some occasional jawboning out of Washington, there simply seems to be no willingness on either side to come up with some reasonable solution  it all appears to be nothing more than a face saving effort.

For a spot on analysis,  including an identification of the guilty party, Mark Grant, author of Out of the Box, has some food for thought in “The Sleeper Must Awaken:”

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