So, I’ve been away for about a week now and everything is really the same as it was – it’s a great day trading environment and swinging is anything but. Now that we’re only a few days away from the deadline on the debt ceiling decision, it puts us in an interesting place as a swing trader. If the ceiling isn’t raised, then all bets are off.. I will stay in cash and try to setup some day trades. However, I don’t believe this will be the case. Politicians are having a great time trying to mix the debt ceiling into budget talks. There is no need for the two to be part of the same discussion, in my opinion. The debt ceiling has to be raised to pay for obligations we’ve already made. The budget/debt/spending/taxes, etc. all need to be addressed, but not in the same conversation as the debt ceiling. Raising the debt ceiling just means we will pay back what we’ve borrowed – ‘we’re good for it’. All of this political theater by both parties will likely result in a clean debt ceiling bill that doesn’t have much of anything attached to it other than raising the limit. The risk, and it’s a big one, is that our AAA rating will be dropped because of how pathetic our government is governing.. that would be the real smack down on the market. For now, we move erratically back and forth with in a range.
As a swing trader, there are only a few days left, so I’m not going to risk adding stocks to the long side until the decision is finally met. When the debt ceiling is officially raised, that’s when we pull out our swing watch list and get to work.
From a technical standpoint the daily SPY looks ready to move up… it might be time to get ready for the bounce. Of course, I’m not taking into account economic data and earnings. There is a lot at play right now, so even a market move from the raising of the debt ceiling may not last too long. It may, however, put in a base and something for us to start from.