Friday was the last trading day on the month and as usual portfolio managers were keen to do a little window dressing.

The news backdrop wasn’t supportive of a rally but the financial media was determined to spin it that way. First, Personal Income & Spending was weak (Income flat & Spending -.2%) but that was blamed on Sandy. But ,we should remember that Sandy was only a three-day event at the end of October. It’s just as logical to assert spending increased late in the month as store inventory was wiped out before the storm. Second, the Chicago Purchasing Managers Index (PMI) came in at 50.4 vs 50.3 expected, and was spun as a positive until you looked at the details. New orders showed significant monthly contraction (45.3 vs 50.3) and prices paid were much higher. This means that companies are paying more for raw materials and other goods and most likely will pass them on to their customers, which will either compress profit margins or be inflationary.

We limped into the close of trading Friday with markets little changed overall. The dollar (UUP) was flat but gold (GLD) once again saw more selling. Commodities (DBC) once again were higher with gains in base metals (DBB) and oil (USO). Bonds (TLT) were slightly lower. Stocks were led higher by a narrow group too difficult to even list.

As a consequence this post is quite short.

For members there is long list of DeMark sequential set-up 9s now posted. I prefer weekly views but the daily can provide a heads up that a reversal in trend could be coming even if it would be short-term in nature.

Also, as we approach the year end, and with so many U.S. equity ETFs to choose from you might benefit from our ebook: The Best ETFs: U.S. Equities

Both Obama and republican leaders made speeches for the benefit of their respective base. Treasury Secretary Geithner had the unenviable task of delivering the WH opening (or at least public) proposal for the fiscal cliff. As noted last night it consisted of $1.6 trillion in new taxes, including eliminating the dividend preference to ordinary income, launching a $50 billion stimulus (as yet defined or for whom) but little in the way of spending cuts. Mitch McConnell is reported to have burst out laughing at this which in itself is funny.

Volume was light as stocks were well marked into the close. Breadth per the WSJ was mixed.

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