US Government Shutdown Drama Approaching ๐ฟ๐ฅค
Congrats for surviving the FOMC this week! A quick 85% gain within 90 mins from taking calls at the opening. Shorted META from the top selling covered call into next Friday. Get ready for more volatility to end September with more news to shake the market next week. At the meantime, have a blessed weekend and relax yourself ๐
Fridayโs slide marked the fourth straight day of losses for the three major indexes. The losing streak came as investors reacted to a signal from the Federal Reserve that it intended to keep interest rates higher for longer.
Another gap fill trade opportunity
Concern also grew around a government shutdown, which could dent consumer confidence and slow down the economy further. House Republican leaders sent the chamber into recess on Thursday.
House Speaker Kevin McCarthy's third attempt to avert a federal government shutdown has collapsed, with only nine days left before the federal government's new fiscal year.
"This is a whole new concept of individuals who just want to burn the whole place down," McCarthy said after a group of Freedom Caucus Republicans voted with Democrats to block a vote on a traditionally popular defense funding bill.
A government shutdown looms into October
While Congress needs to pass 12 appropriation bills to fund the federal government, Fear & Greed Trader advises investors not to overreact to the looming shutdown.
"Markets are largely unaffected in the lead-up to a shutdown, and on average, continue to rise in the 30 days following a resolution."
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Sell covered call
โInvestors are staring at the ground right now worried about a shutdown,โ said Jamie Cox, managing partner at Harris Financial. โMarkets are just sort of waiting around to see when it happens, and then trying to discount the duration of it.โ
Weekly options trading summary
Now that FOMC is over, the urgent resolution will be the continual auto strike and the impending government shutdown soap opera coming up next week.
S&P 500 has filled 2 gaps posted this week and two more approaching next week. Have a follow to trade the volatility to end the weakness in the final week of September.
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Shutdowns that last only a few days would have little practical impact, particularly if they occur over a weekend, but the broader economy could suffer
Each department and agency has a contingency plan to determine which employees must keep working without pay.
Hundreds of thousands more would be furloughed and sent home, with their paychecks delayed until there is a resolution
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