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There will be a deal but we are witnessing the slow break between the libertarians and business types. Congress controls if the government shuts down the executive branch controls how the government shuts down...that is tremendous leverage for the executive branch. If it does happen watch the business side of the coalition and the stock market go nuts until Congress relents and they will relent under heavy pressure. The way it works in Washington is that nobody gets all they want. The problem with the libertarian wing of the party is that they are demanding to get everything and compromise nothing...what they don't realize is that the very nature of compromise always makes the country a little bit more progressive because the other side always always gets something.
I won't be buying anything on Monday. If I were buying on Monday biotech sounds like a good bet. I would look at industries that get beat up not because they are performing poorly but because they are dragged down with the rest of the market. The shut down won't last long though because they are a representative body and they will hear from their constituencies depending on how the executive branch chooses to apply the cuts. Will it be military pay, farm payments, social security payments, delayed oil and gas lease approvals, delayed prosecutions of criminals, national parks, or a combination of all of them--who knows how it will be played.
I don't have an opinion about whether the government is going to shut down or not or how the markets will respond to it. What I do know is what I've finally learned to try and do in these situations, which is just focus on the price action and the patterns versus all of the media hype and stupid political blustering. Morons. Too bad we don't have a system where we can just have a do-over at any time, dump them all and start over. At least it would be nice to have them represent we the people instead of themselves.
Just not getting that much of a move, and you're seeing little rumors propping up the market. Will consider buying if there is more of a defined move. Rumor of a one-week extension being worked on to postpone govt shutdown.
Reply to @linter: The main pattern I watch is to see if the bears can take over this market. So far nearly every time they try to the bulls come in with buy orders to defend it. For now I have no reason to hide.
Reply to @scott: I'm shocked there wasn't a bit more panic selling. Makes you wonder what it would take to get a 10% correction. Is "tapering" the only market kryptonite?
Reply to @JoeNoEskimo: Futures actually higher (at least at this point.) I don't think an agreement is any closer to happening. I continue to focus on looking at non-US ideas, if there is an actual pullback. If markets don't do much, I think it's going to be interesting to see what happens if you do not get market pressure on government to come up with a resolution.
Reply to @Mark: Looks like you read right! I would have thought markets would not like the uncertainty. But company earnings guidance sounds higher lately and at end of the day is probably all that really counts. Perhaps some "bargain hunting" given recent string of down days and with hope that shutdown will be short lived...that calmer minds will prevail. Is that possible?! I personally hate the polarized debate leading to (temporary) shutdowns and looming defaults. Like your advice, probably better to simply focus on the market action during awkward such times.
Reply to @Charles: For me, Mr. Price is all that matters. Everything else, most especially media babble, is just foo-foo. Is the government shut down? I hadn't noticed. Been waiting a long time for them to go to work. "In politics, stupidity is not a handicap." Napoleon Bonaparte
Reply to @Mark: Ha! I love it. It's very true: Congress takes 239 days off each year. Can you believe? Here are some related words of wisdom from an old friend: "There are some counter-intuitive things that you must accept."
So, today, the market took shutting down the government as a step in the right direction.
Comments
Edited to add: it's remarkable to me, but I really question whether there will be a deal on Monday.
I'm hoping for a swift tanking biotech scenario, so i can squeeze in at anywhere other than a total top.
what about you?
Not a slaughter just yet.
and the patterns, too, what are they telling you?
So, today, the market took shutting down the government as a step in the right direction