All of the talking heads could only talk about the haggling in Washington today and the prospect of a government shutdown this evening. In the meantime, investors are taking some of their capital off the table, just in case the end of civilization is near, as the Washington politicians are predicting. Remember how catastrophic the sequester was going to be?

SPX lost $10, closing at $1682. RUT remained pretty flat at $1074, down less than a dollar. As one might expect, volatility popped up a bit with VIX increasing a little over one point to 16.6%. Trading volume increased with trading on the NYSE up 16% and up 9% on NASDAQ.

SPX broke down through its 50 dma today, but recovered to close just above that support level. Breaking through that level in the morning (assuming the government does shut down tonight) could lead to some serious damage. I will be watching the May high at $1670 and the low from the last pullback around $1630 for possible support levels. RUT opened this morning just above its highs in August, backed off a few points and then recovered to close near yesterday's close, only down about forty cents. RUT's 50 day moving average (dma) is at $1047 with a weaker support level at $1040 and the August low at $1010. It is interesting that RUT continues to lead this market, in spite of a host of negative hand wringing over the past several weeks. That is evidence of a strong bullish underside to this market. A resolution in Washington could stimulate a strong rally.

My Oct iron condor on RUT at 910/920, 1110/1120 and 1130/1140 stands at a net P/L of -$720 or -4% with delta on 20 contracts at -$89 and theta = +$172.

I have yet to hear a single media outlet today observe that this shutdown is at least partly rooted in Obama's absolute refusal to negotiate. Instead, the media lap dogs consistently tell us the threat of a shutdown is due to some "extremists" who want to rid us of ObamaCare, a law that over 50% of Americans dislike, according to several polls. I suppose government by the people is an old fashioned idea.