With last week behind us and still no resolution to the Fiscal Cliff problem, we are starting to see a pattern reminiscent of the European Debt Crisis. Meaning that, one day, resolution is at hand. Next day, no compromise on the horizon. The markets will act accordingly. Which is frustrating if you are an investor but a potential bonanza if you are a trader.

The bottom line still remains the economy, prospects for the economy, the effects on the market of that potential.

With housing recovering nicely we feel the prospects for the economy are getting better. Consumer sentiment is getting better and one major hurdle to the future growth, inflation is still a non-factor. So we have some positives and they will continue to provide an underpinning to the market.

One factor that seems missed by all is the way the market is acting. With the worse case Fiscal Cliff scenario still front and center last week we would have expected the market to continue a steeper sell off than the previous week. While equity markets were weaker, it was much weaker and therein lies the strength. If a market can absorb potential catastrophe and hold some important support levels, that market is a lot stronger than people believe.

This will be a short week filled with hope that our beloved politicians can work something out. We don't think so.

The only significant data will be Initial jobless claims on Wednesday and we expect to see some improvement. While last weeks numbers reflected Hurricane Sandy and its effect on the Mid-Atlantic region, we do expect to see some positive growth as the process of rebuilding starts.

Happy Thanksgiving to all.