The spin machine is in full circle as the Head Zombie continues to blame the Republicans for the government shutdown at a pep rally in Maryland. He continued to preach about how rosy the Affordable Care Act is and that it is the law of the land but our research shows the average bill is going to be $300-$500 a month for a silver or bronze plan. The talk is ObamaCare care is cheaper than a cellphone bill at $71 a month/ average. To us the math seems funny.
What isn’t funny is the pullback in the market as the bears are once again pushing support and have cracked the 15,000 level on the Dow. The other indexes are following suit as our downside trigger targets to go short are coming into play.
We know the zombies like a Hollywood ending and from our point of view, the shutdown could last up until October 17. We would love to believe an agreement could come before the weekend or by Monday but we doubt either side will come to their senses until the cheeks tighten.
The Dow is down 167 points to 14,966 while the S&P 500 is off by 21 points to 1,673. The Nasdaq is lower by 50 points to 3,764 and the Russell 2000 is declining 12 points to 1,070. Meanwhile, the S&P 500 Volatility Index ($VIX, 17.74, up 1.14) is dancing with the 17.50 mark and we have warned a close above this level could lead to a run to 20+. If this were to happen, look for the S&P to test 1,650.
Despite the gloom-and-doom, we have a Profit Alert on a trade that is up 121% and our JC Penney (JCP, $8.44, down $0.28) put option trade is approaching a 300% gain. We wanted to get our Midday report out early due to the profit Alert but we could have a New Trade or 2 coming your way before the close.