Stocks were in selling mode today, as the markets gave back last weeks Thanksgiving holiday rally.

As you will note, the SP 500 failed to strike a higher high in this rally, setting it up for a rollover retracement.

As of the close today I have taken off the longs in volatility and the shorts on the SP index. I may be premature in this, but if I wanted to be aggressive about this I would be trading the futures on a short term, as was my style for many years.

So tomorrow is the big Non-Farm payrolls report. I expect that may have some potentially perverse effects, depending on how the market wishes to interpret this data in the light of the Fed’s policy change with regard to ZIRP.

I am finding this whole hullabaloo about a 25 basis point increase a little puzzling. I doubt anyone thinks that this is a routine change and the beginning of an aggressive cycle of rate increases, with the economy still languishing in a zombie like ‘recovery.’

But the risks in the market are vastly mispriced, and the overall constitution of the markets are hardly ‘robustly,’ being more like meringue than a solid foundation with which to support a real economy.

Have a pleasant evening.