So, tapering seems to be taking a back seat for the moment, but markets seemed to go awfully quite on that other big outstanding issue, the US debt ceiling. It is interesting how markets can choose to ignore something as and when they choose to do so, perhaps in part because they want to draw in the unsuspecting before they have a sell off. It isn't as if the debt ceiling issue had gone away or even looked like being resolved, if anything attitudes on both sides seem to have hardened.
It's been a while since we read this sort of news.
A potential shutdown for the U.S. government by Monday weighed on sentiment. Fears the Treasury will hit the debt ceiling by mid-October only added to investor worries.
Naeem Aslam, chief market analyst at AvaTrade, said traders are “taking the profits from the table.”
“With political opera taking place in Washington, with the government shutdown threat and the Italian political crisis in Italy, volatility in the market is extremely elevated and perhaps sitting on the sidelines could be the best option for traders,” he wrote in a note.http://www.marketwatch.com/story/stock-futures-sag-on-shutdown-fears-2013-09-27
Given that the poilticians will probably take this down to the wire, it is difficult to feel comfortable going long in the market right now. For those that feel comfortable however, shorting might offer better opportunies, as long as you keep one eye on the prospects for a deal.
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