We’re used to Fed Reserve fueled rallies and now we can add government shutdowns to the list of bullish events <grin>… Our Democrat and Republican Congress are at an impasse over the fiscal responsibility of the US Federal Government. As many as 800 thousand workers have be furloughed (time off without pay). Stop gap measures have been proposed, but the White House has refused them saying the proposals “show utter lack of seriousness for funding the government.” The ES spent the day see-sawing in reaction to new information from within a large upward trending channel. Ultimately with the removal of uncertainty over a shutdown, the sky did not fall and the stock markets rallied. It will be interesting to see if the rally continues or is retraced as the shutdown wears on…
The ES had rotated down to the bottom of an upward trending channel into the cash open. The DTG long 76 channel was being tested and after the ES made an attempt to move down, there was a potential trapped trader situation just below the level and today’s example trade. The low turned out to be the low of the day where the ES ended up over 17 points.
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