The S&P 500 is at the highs of the day, up 12 points to 1691 as the market bets that Congress gets its act together before markets re-open Monday. I’m closely watching the headlines but not much is trickling out of Washington at the moment.
After all the excitement, the S&P 500 will finish the week virtually unchanged from where it closed last Friday. That’s a bullish sign once a deal is sorted.
Part of me thinks the market needs to have a little freak out before Congress figures it out. My bet is that we don’t get a deal on the weekend. I think Democrats are still happy to let the Republicans take the brunt of the blame; meanwhile Republicans are digging in.
Last Friday at this time I talked about buying the yen (selling USD/JPY or CAD/JPY) on the Washington put and that proved to be a great trade. I think you make the same trade this week but, again, it’s probably better to wait until the Tokyo open.
