Today's trade is going to revolve around the ability or inability of our elected officials to keep the government open. House Republicans voted late Saturday to fund the government and delay Obamacare for a year, upping the ante in their fiscal showdown with President Obama. This is the Republicans' way of extracting concessions on Obama's Affordable Care Act. Any time there is uncertainty the stock market reacts by selling off. The big question is, will this be like all the other recent negatives that the public sold into?

The Asian markets closed mostly higher and Europe is down across the board .The last trading day of September starts with Chicago PMI, the Dallas Fed manufacturing survey and 3- and 6-month T-bill auction. The week as a whole has 21 different economic reports, 13 T-bill and T-note auctions or announcements, Ben Bernanke and St. Louis Federal Reserve Bank President James Bullard give opening remarks at the St. Louis Fed's Community Banking Research Conference on Wednesday, Richard Fisher and Jerome Powell from the Fed speak on Thursday, and the weekly jobs number comes out on Friday. There will be no rest for the weary this week ...

As of this morning's open the S&P has closed lower six of the last seven trading days and last week had its first five-day consecutive decline. It's been an amazing letdown with little sign of letting up.In addition, both the S&P and Dow saw their first weekly loss in foyr weeks. The prospects of a government shutdown hung over the markets all last week. The S&P futures have declined 2% since the September 18, Fed no-taper 1725 contract high. They are still up 19% on the year.

Our View:

The "walkaway" trade is going to be overshadowed by the headlines concerning the government shutdown and today's quarterly rebalance. Trading is all about making decisions and today is going to be filled with them. It is our guess that at the last second the the government will pull off a deal that will cause some type of rally.

It's important to remember that the end of September is prone to weakness from end-of-Q3 institutional portfolio restructuring (rebalance). According to the Trader's Almanac, the last trading day of Q3 has the Dow down 11 of the last 15 with a massive +4.7% gain in 2008. The first trading day of October fits the current patterns, Dow down 5 of the last 7 with a -2.1% loss in 2009.

The question today is not just the shutdown but also about the month of October and all its nasty ups and downs. While all the negatives have been laid out "everyone" is supposedly short again. From the Fed no-taper to the German election, the markets have rallied after every event, and that is what we think will eventually happen here. If the S&P gaps sharply lower we lean to buying it with tight sell stops and would look to sell the rallies thereafter.

Lastly, if you're not concerned about October you should not forget about the Dow's worst week in history, when it lost 1874 points (-18.2%) on the week ending 10/10/08. So while we may get some bang for our buck today, we feel confident the rest of October will be filled with some big ups and downs. In order to get it directly from the source we asked our good friend Jeffrey Hirsch from the Stock Trader's Almanac to give us his view on how October might play out and where he expects the S&P at year end. More on that later this week.

As always, use stops and keep an eye on the 10-handle rule. Don't forget to catch MrTopStep on The Closing Print video. We report directly from the SPX pits, wrapping up the day and positioning for trade tomorrow.

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