The indexes are red, only by a few points, but the greater issue at hand is whether the government shuts down or not.
Democrats have agreed to $38 billion in cuts, one of the largest spending cuts in recent memory. the major sticking point at this time, is planned Parenthood, which the Republicans want to stop giving aid to. the Democrats have called this a sticking point, and it looks like mr. Market is waking up and paying attention.
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The deadline is midnight tonight, and with the shutdown getting ever closer, will the markets tank, essentially forcing a deal? If so, the market can be expected to bounce back after the two sides get a deal done.
If traders believe this will happen, then they could look at adding ProShares S&P 500 Short ETF (NYSE: SDS) in response to a government shutdown, and then going long SPDR S&P 500 ETF (NYSE: SPY) once it becomes clear that the two sides have worked out their issues.
There is an awful lot riding on a government shutdown, so it’s in the people’s best interests for no shutdown. If the government is shut down, essential services will be cut, or furloughed, and that is something no one wants.
(To see what will happen when the government shuts down, click here.)
We all understand spending is out of control, but that’s why we elected those in Washington. we want you to make the tough choices for us, in the best interest of ALL, not just some.
