Next Week's Market: Beware the Continuing Resolution Bounce

By David Miller  SEP 27, 2013 1:48 PM

Nine observations about how the situation in D.C. is shaping up.


For what it's worth, I'm on the executive board of my local Democratic party district organization. I mention this because it's impossible to talk about what's going on in Washington, DC, without some bias creeping in, and we always want to make bias clear here at Minyanville. I also mention it because I think it's relevant to point out that I have some experience and contacts in the political arena.

I was chatting with some of those contacts this week and here is how the situation is shaping up:
Monday's market will be rough if the above is correct. Once the CR is passed, I'd expect a relief rally in the Dow (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX), but I can't emphasize enough that passing the CR is simply political kick-the-can. The debt ceiling is actually a bigger deal economically, especially globally, and that's where the Tea Party has decided to make its stand. Bottom line: Be careful buying any CR-related market bounce early next week.

Twitter: @AlpineBV_Miller

No positions in stocks mentioned.

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