Officially: The United States has entered a partial government shutdown after the House of Representatives failed to vote on the funding agreement before the deadline. Global markets are awaiting Monday's opening to assess the magnitude of the shock and the impact of the interruption of economic data.
The thing we were afraid of has happened #Washington has currently partially closed its doors and people are sleeping, but this calm is the calm before the storm that we will see on Monday.
Why is this close "treacherous"?
The weekly trap: The close happened during the weekend (Saturday and Sunday), meaning the financial markets (New York Stock Exchange and others) are already closed. This means we won’t see the real reaction on Monday morning.
Monday's Game: The House of Representatives will meet again on Monday. If they resolve the issue quickly, it will be a small "trap," but if things get complicated, we will start to see a violent drop in stocks and crypto due to liquidity and data shortages.
The outlook is cloudy: As we mentioned in a (previous post), there are no job numbers anymore, and investors hate "uncertainty" more than the ugly news. The absence of numbers makes whales flee to "cash" until the picture becomes clear.
What you need to understand, my sad trader friend 🥸
"The electricity went out, and everyone is asleep"; Monday is "judgment day." If the markets open and Washington is still "closed," we will see a respectable "shake-up" because futures will react to the news as soon as trading begins. Everyone is waiting for Monday to know if this is a "closure" for a few days or a long "suspension" like last year.
Watch the opening; keep your eyes on the futures contracts on Sunday night/Monday morning.
Gold and Yen: They will be the "stars" in the coming days because they are the only safe haven that people trust during crises.
Don't rush; don't enter big trades on Monday as soon as the market opens. Wait for the political "intentions" in Washington to clarify.