The unbelievable has happened and the market doesn’t like it.  As can be seen here the chart doesn’t like it either.  Prices are entirely too close to the nov12 trendline.  While not the fatal trendline, penetration would damage the bull trend — how badly not known but any bad is bad.

A closer look:

(same link)

We commented as this was starting that we would see volatility.  There has been a suggestion from Washington that the Speaker would not allow a default (which is the  second act of this drama).

Our take is still optimistic.  We think that when the blood is mopped up this will be a buying opportunity.  Maybe a big one.  Even today when there was a hint of settlement the market rebounded as seen by the long tail (shadow) on the candlestick.

Meantime in the other ring of the circus speculators are snapping up IPOs.  We have sneered at this process in which Wall Street sells us something they don’t want — otherwise why would they sell it?  But there is an ETF which will allow us to participate in this process without buying pigs in pokes.  FPX.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p20970412253&a=318176721

We would start out by watching this, not by buying it now.  When the scorpions in Washington finish their mating dance (or death duel) then we look at the chart  to finalize a decision.