I really think a plunge at the open would be an overreaction. Will this shutdown really be worse than the sequester? Remember the market rallied after the sequester happened.
Remember when investors freaked out over the sequester? Then when the sequester finally happened, Wall Street shrugged it off and the market rallied big time. Same will happen with the shutdown.
Any dip on a shutdown will last just a few hours. Who cares if govt employees can't go to work for a few days? Who cares if national parks are shut down? The country will continue to function.
The debt ceiling in a couple weeks, however, might result in a crash the bears are hoping for.
Sounds like Repubs will give in on the budget deal to avert a shutdown, but will try to tie the Obamacare defunding to the debt ceiling. We rally for another 2-3 weeks before we crash!
Even if the market will fall a lot more, I would have to think the market will take a breather from the 5 straight days of selling and maybe end +10 or +15 tomorrow. We are still technically in a bull market so there should be a bounce. Then the selling can resume, if indeed this is the start of a crash.
The market knows something will get done at the last minute. If for some reason it doesn't, then you will see the VIX spike to 20 in a blink.
The VIX will be less than 15 or over 20. It will not touch anything between 15 and 20 between now and next week.
OK... so the market dropped last Thursday on shutdown/debt ceiling worries.
Then it dropped Friday on the same worries.
Then it dropped Monday on the same worries.
Then it dropped Tuesday on the same worries.
Now it dropped today on the same worries. #$%$???
Either down 20 or up 20, I think.
Yes it is all a show, the pullback will let them get in cheap... but how large of a pullback? 5% or 10%?
This might be the first time this year the market was down 3 days in a row. Futures should be +30 by now. But they are red, the market might be about to crash.
The market so far this year has NEVER gone down 3 days in a row. We've already had 2 down days in a row, so of course futures are up now.