Government Shut Down Day 2

Second day of the Government's shutdown.  Futures responding by loping off about .75% at the open so we're likely going to see a down morning and most likely a down day in the market..  If this occurs then stocks will have been down eight of the last ten days.  There's been much discussion about the roughly 18% gains that markets have tacked on this year.  There's been less discussion about the reality that the S&P 500 is today roughly where it was in mid-May.

About the shut down, see this Politico article on how the debt ceiling and the shut down have now collided into one big mess.  Of course one of the reasons we're where we currently sit is the Republicans strident opposition to the Affordable Care Act or "Obamacare".   In that regard there's a theory making its way around the Street that Republican opposition comes from the fear that people will like it.  There may be something to that.  I'm beginning to wonder about the reality of what happens if Obamacare works.  Not enough time to elaborate on this today but I'm going to revisit this subject at a future date.

Back to the markets, the simple money flow problem is that stocks aren't oversold enough yet to mount any sustained rally.  Probability suggests that until we get to that point then stocks are likely to flounder.


 *Long ETFs related to the S&P 500 in client and personal accounts.