Is the market putting on a show for the politicians?
I think so.
Does the market expect the government to run without a sequester?
I don’t know.
The Republicans might decide to call Obama’s bluff and try to lay the blame at his feet.
What is the chance the Republicans do so?
Who knows? They howl at the moon. I would expect a sell off if they did. That is Friday or so.
In the meantime, the Chairman will speak, and this market signal may have been for his ears, too.
And we must also note: it is in periods like this that much money gets chopped up anyway– the two months leading to the sell-off in May trade.
And a note of some importance: When one has a 15-20% profit in a VXX trade, take it. There is no reason to extend the trade with short puts. The next +1.5 STD move in the VXX is around the corner– even later in the day.