U.S. Government Shutdown Day Seven, Stock Market Selling Remains Controlled

By: PhilStockWorld

Courtesy of Doug Short: The political deadlock on Capitol Hill showed no progress today, and a CNN/ORC poll shows that both parties are taking a hit in public opinion, with Republicans faring slightly worse. The S&P 500 opened at its -0.20% intraday high and plunged to its 0.93% intraday low two minutes later. The index quickly recovered about half its loss and then traded in a narrow range until the final hour, when it sold off to its -0.85% close.

Here is a 5-minute chart of the day with a bit of Friday afternoon for context.

Here is an hourly chart since late August. The index is only down 2.86% since its closing high on September 18th and only a fractional 0.32% since the onset of the government shutdown seven calendar days ago(five of which were market days). Clearly the market reaction to the congressional travesty is controlled.

Volume today was on the light side as some of the players remain on the sidelines. On a daily chart we can also see that today’s close slipped below the 50-day price moving average.

The S&P 500 is now up 17.52% for 2013 and 2.86% below the all-time closing high of September 18.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

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