This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Day "2" of the Shutdown and the Market Shrugs...Again

Well, here we are. It is day "2" of the government shutdown and the market is once again shrugging off the hysteria that has taken over the media the past two trading days. Equity index futures have bounced from the lows that they hit earlier this morning, with the December S&P E-mini contract currently trading down .37% at 1683.25 as we approach the final minutes of the trading day. This is a full 10 points higher than the low of 1673.25 it hit right at the open of trading. Once again, getting close to the key 1670 level that we have discussed in recent days, and bouncing.

In the metals we saw a significant bounce today from the intense selling pressure in both the Silver and Gold December contracts yesterday. Yesterday's move was one that left many traders scratching their heads, as most thought the government shutdown would have played right into the "gold bugs" hand. Instead, we saw Dec. Gold quickly approaching that 1280 level yesterday, only to bounce back over 2% today to 1320.70. We saw a similar bounce in Dec. Silver today as it rallied up to 21.897 from the 20.63 low that it hit yesterday. Should the government shutdown progress beyond this week, I would think that both gold and silver would continue to benefit as they did today.

Otherwise, I tend to believe that the equity index markets will begin to lose the patience that they are displaying at the current moment if the shutdown begins to meld into debt ceiling talks, which would put the US at more economic risk than we have seen in a long time. While the government shutdown is newsworthy and keeps a steady stream of eyes on the major media networks, a failure to raise the debt ceiling is what I would consider to be the "real deal" in terms of event risk. A failure to increase our debt limit, which essentially means a refusal to service obligations already incurred, would be unchartered water for this country.

Looking back to the 2011 debt ceiling debate, which resulted in a downgrade of our debt by Standard and Poor's to AA+, we experienced a 16.5% drop in the S&P over a 2 week period, with 5.6% of that coming in one day. And that was on the heels of a debt ceiling that was in fact lifted 4 days previously. So who is to say what the impact might be to financial markets this go round. Thus, we continue to move forward under the assumption that the markets will remain volatile and are hedging ourselves accordingly. Prepare for the worst...hope for the best.

Travis McGhee

CEO, FuturesANIMAL

OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits

FuturesANIMAL can be followed on Twitter at twitter.com/ FuturesANIMAL

Travis can be followed on Twitter at twitter.com/Travis_McGhee

At the time of publication, Travis McGhee held positions in SPY, SLY.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
GLD $108.82 0.00%
SLV $13.92 -0.50%
SPY $192.52 -2.60%
AAPL $110.00 -2.40%
FB $86.72 -3.00%

Markets

Chart of I:DJI
DOW 16,528.03 -114.98 -0.69%
S&P 500 1,972.18 -16.69 -0.84%
NASDAQ 4,776.5080 -51.8170 -1.07%

Free Reports