I don’t know about everyone else, but I am tired of hearing two words: fiscal cliff. I keep Bloomberg TV on in my home office all day long and must have heard those two words several hundred times today.

Unfortunately those words have everyone’s attention and that will be the case until Congress and the White House agree upon a budget deal.

The impact this is having on the market is apparent, as we see the choppy trading days with very little traction to be had by the bulls or the bears.

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One indicator that struck me as being indicative of the current uncertainty was the Commitment of Traders (COT) report from Friday and in particular the COT for the e-mini S&P futures.

The commercial hedger group ended up being net short over 250,000 contracts. This is the first time since January 2009 that the group has reached such a bearish threshold.
You may recall that January and February of 2oo9 were not pleasant months for the market.

The last time the group was over 250,000 contracts in either direction was last December when they were net long over 350,000 contracts. The market started its four-month rally that month and the Standard & Poor’s 500 gained over 22 percent from the low to the high.

Sure the commercial hedgers could just be playing it safe, but their track record of being long and short at the right time should not be ignored.