The Russell 2000 Index (RUT) hit a new all time high today, closing at $1090, up $6. SPX didn't set a new high, but it did trade upward by $7, closing at $1710. SPX's all time closing high is $1726. But the question is whether this makes any sense with the politicians bickering and posturing? Perhaps the market is telling Washington that they don't take any of these scare tactics seriously, that the treasury debt interest will continue to be paid and that an agreement will be reached at some point in the near future. I happen to agree with that position, but I am still surprised that the market is taking this so well. The volatility index, VIX, traded up to 17.7% this morning, but then gradually calmed down to close at 16.1%.

However, trading volume was down across the board, so maybe we shouldn't take these increases too seriously. Trading in the S&P 500 stocks decreased to 1.7 billion shares; trading volume on the NYSE declined 11% and trading dropped 15% on NASDAQ.

No significant economic data was reported today. The Empire manufacturing report is due tomorrow and Fed's beige book and CPI data are due Wednesday. But it isn't clear if any of these events will occur given the government shutdown. Today's strong run in RUT forced me to close the October 1110/1120 call spreads. That put another cramp in the potential gains for October, which now stand at +5.4%.

The politician watch continues. I continue to write unflattering emails to my congressman and senators, but they aren't listening. They are too busy posturing for the cameras.