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The market staged a significant reversal on Wednesday. The Dow Jones Industrial Average (DJIA) was down more than 100 points early in the trading day and then managed an impressive rally that had the index close up more than 100 points. The other major indices followed suit. The catalysts for the turnaround were declarations from both Speaker Boehner and President Obama that they hoped each side could reach a deal successfully by Christmas. Although I am of a slightly different political persuasion than Jim Cramer, I agree with his assessment that we are going off the fiscal cliff and we should prepare accordingly.

Although the Republicans have stated they are open to raising tax revenues through closing, modifying and capping deductions, they are not open to raising any tax rates. Doing so without substantial cuts in spending and some entitlement reform would be political suicide in many Republican leaning congressional districts. President Obama has said he is open to a deal that is "fair and balanced," but he has put no real spending cuts on the table. Moreover, the Democratic Senatorial leadership (Durbin and Reid) have basically taken any kind of entitlement reform (which drives more than 60% of the federal budget) off the table. Both sides are spending more time courting public opinion rather that meeting behind closed doors to come up with workable solution....339 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.