MLR - PMP 9/30/13

Published : September 30 2013 at 8:46 ET

Major averages were lower Friday on mixed volume, though the NASDAQ Composite managed to recover some of its loss. Futures are down as the House and the Senate continue to argue over issues as a government shutdown grows closer. If they cannot agree by the Tuesday morning deadline, the government will shut down for the first time in 17 years. From November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996 the U.S. government was shut down as a result of a budgetary impasse between Congress and the White House. The major markets actually managed minor rallies during these two brief periods.

There have been 17 government shutdowns since 1976, ranging in length from one to 21 days. None has caused a market meltdown. The average decline in the S&P 500 during a shutdown lasting 10 days or more is about 2.5 percent. For shutdowns lasting five days or fewer, the average decline is 1.4 percent.

Thus while a government shutdown sounds scary, history has shown it has minimal impact on the general markets. Obama disagrees, saying the threat of a shutdown already is having "a dampening effect on the economy." The president also again urged Congress to raise the federal debt ceiling and said he would not negotiate on the issue. Failing to act on the debt limit would be "far more dangerous than a government shutdown," Obama said then continued, "It would be an economic shutdown, with impacts not just here but around the world." History says otherwise.

Investors should be alert to potential buying opportunities as leading stocks pull down into logical areas of support, in our view.

Virtue of Selfish Investing members have been and will continue to be apprised of such opportunities in the real-time reports we send out.

This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.