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Shutdown Bets Cool While S&P Brushes Off Washington Drama
Danny Riley
September 29, 2025
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I'm not going to do all the play-by-play. The ES gapped higher after the open on Friday and rallied up to 6703.75 at 10:00 a.m. It then sold off to 6657.25 at 10:24—just above the 6653.25 Globex low. It popped and dropped a few times, made a higher low at 6658.75, and then rallied up to 6679.50.
From there, the ES sold off again, making another higher low at 6663.25 at 11:57. It then traded up to 6694.25 at 1:36, pulled back to the 6686.25 level, and rallied to a new day high at 6700.50. After that, it pulled back to 6691.50 and traded 6693.00 as the 3:50 imbalance showed $665 million to sell, which later went out to $1 billion to sell.
The ES traded down to 6689.50, then traded 6666.00 on the 4:00 cash close, and settled at 6669.50, up 36.75 points or +0.55% on the 5:00 futures close. In the end, Friday's trade was all about how it closed on Thursday.
In terms of the ES's overall tone, it squeezed out a lot of shorts and ran a lot of buy stops. In terms of the ES's overall trade, volume was lower at 1.27 million contracts traded.
This week in releases:
Date | Economic Releases | Fed Speakers |
|---|---|---|
Sep 29 (Mon) | • 10:00 AM ET: Pending Home Sales (Aug) – Monthly change in homes under contract but not closed. | • 7:30 AM ET: Gov. Christopher Waller • 10:00 AM ET: Cleveland Fed Pres. Beth Hammack • 6:00 PM ET: Atlanta Fed Pres. Raphael Bostic |
Sep 30 (Tue) | • 9:00 AM ET: S&P Case-Shiller Home Price Index (Jul) – Home price changes in 20 major metro areas. • 9:45 AM ET: Chicago Business Barometer (Sep) – Manufacturing/non-manufacturing activity gauge (Chicago PMI). • 10:00 AM ET: JOLTS (Aug) – Job openings, hires, and separations for labor market insights. • 10:00 AM ET: Consumer Confidence (Sep) – Conference Board report on consumer sentiment. | • 6:00 AM ET: Vice Chair Philip Jefferson • 1:30 PM ET: Chicago Fed Pres. Austan Goolsbee |
Oct 1 (Wed) | • 8:15 AM ET: ADP Employment Report (Sep) – Private sector payroll preview. • 9:45 AM ET: S&P Global U.S. Manufacturing PMI (Final, Sep) – Final manufacturing activity reading. • 10:00 AM ET: Construction Spending (Aug) – Total new construction value. • 10:00 AM ET: ISM Manufacturing PMI (Sep) – Key manufacturing sector status report. | None scheduled |
Oct 2 (Thu) | • 8:30 AM ET: Initial Jobless Claims (Week of Sep 27) – First-time unemployment filings. • 10:00 AM ET: Factory Orders (Aug) – New orders for durable/non-durable goods. | • 10:30 AM ET: Dallas Fed Pres. Lorie Logan |
Oct 3 (Fri) | • 8:30 AM ET: U.S. Employment Report (Sep) – Includes Nonfarm Payrolls, Unemployment Rate, and Average Hourly Earnings (highly anticipated). | None scheduled |
VIX Drops 8.66%
I don't know how many people were watching, but the VIX fell out of bed late last Friday. The VIX closed up +0.65% on Monday, gained +0.54% Tuesday, fell -0.46% on Wednesday, dropped -0.56% on Thursday, and then fell -8.66% on Friday.
Why was the VIX up so much last week? Option traders got too loaded up buying options ahead of Powell’s speech on Tuesday, then bailed out of positions—and the VIX fell. The last time the VIX dropped more than -8.66% was back on August 8th, when it fell -14.34%.
Our View
We live in a bipolar world, and no matter how much people complain, march, or riot, we still need to make sure the government keeps its doors open. I have to be honest, I remember a few of the government shutdowns, but not all.
Since the late 1970s, Congress has experienced 23 federal funding gaps.
But after a 1980–1981 legal ruling clarified that the Antideficiency Act requires most government work to stop during a lapse, only 10 of those gaps resulted in full shutdowns with employee furloughs.
The table below lists those 10 shutdowns in order, with their dates, duration, number of furloughed workers, and main cause.
This is how the S&P 500 fared during those 10 shutdowns:
6 were up, with a total gain of 14.13%
4 were down, with a total loss of 2.3%
(Excluding +10.3% from Dec 2018), the net performance is +2.39%
The average loss is -2.5%.
It looks like, more often than not, the S&P tends to move higher after shutdowns.
Table here - S&P Performance During Shutdowns
Date | Duration | S&P 500 Net Change | Notes |
|---|---|---|---|
May 1, 1980 | 1 day | +0.53% | No significant market impact |
Nov 20–23, 1981 | 3 days | -0.90% | Sparse data; minimal impact with flat performance due to brief duration |
Oct 3–5, 1984 | 2 days | +0.1% | Slight positive return |
Oct 16–18, 1986 | 1 day | -0.3% | Slight decline |
Oct 3–5, 1984 | 3 days | -1.18% | Down over 1% |
Nov 14–19, 1995 | 5 days | +0.1% | Slight positive return |
Dec 16, 1995–Jan 6, 1996 | 21 days | -2.0% | Modest decline during extended shutdown |
Oct 1–16, 2013 | 16 days | +3.1% | Market rebound driven by resolution expectations and Federal Reserve actions |
Jan 20–23, 2018 | 3 days | +0.1% | Flat to slightly positive return |
Dec 22, 2018–Jan 25, 2019 | 34 days | +10.3% | Strong rally, partly due to dovish Federal Reserve pivot |
MiM and Daily Recap
The overnight Globex session opened at 6662.75 and quickly pushed higher, printing 6699.00 at 18:00. Sellers then stepped in, dragging the ES down to 6657.25 by 20:30 before a modest rebound carried prices back to 6662.75 at 20:50. That bounce proved fleeting, with a lower high at 6661.75 by 21:30 followed by renewed selling pressure that drove a new low of 6655.00 at 21:40. A quick recovery attempt lifted the contract to 6663.75 at 22:30, but sellers once again reasserted control, taking ES to 6653.75 at 23:20.
From there, buyers mounted a stronger rally, pushing higher at 00:30. The rally faded, however, as the contract fell back to 6657.00 at 05:00 and retested that level at 07:20. Heading into the cash open, ES climbed steadily, setting the high of the Globex session at 6690 on the 8:30 AM news cycle and setting up for a strong open.
The cash session began at 6673.50, and spiked to 6703.75 at 10:00 for the day’s high. Momentum then reversed, with ES sliding sharply to 6657.25 at 10:25, down a solid 46.5 points setting the low of the day. Buyers responded with a measured advance, carrying the market to 6696.50 at 13:25. After a brief dip to 6687.25 at 14:10, ES pressed higher again, reaching 6700.50 at 14:40 and then 6703.00 at 15:30.
The afternoon action turned choppy. A pullback to 6690.00 at 15:50 was followed by modest stabilization into the close. The regular session settled at 6696.25, up 22.75 points or 0.34%. On a cash-to-cash basis, ES gained 35.75 points, or 0.54%.
Total full-session volume reached 1.27 million contracts, with the bulk concentrated in the regular session at just over 1.03 million.
Market tone & notable factors
The day’s tone skewed cautiously bullish, with buyers defending overnight lows and extending rallies in the regular session despite intraday swings. The early spike higher in regular hours gave way to a sharp selloff, but the market’s ability to recapture losses and hold near session highs into the close reflected underlying resilience.
Market-on-Close (MOC) imbalance data showed a heavy -$2.56B to sell imbalance at 15:53, with the sell side dominating at -72% dollar flow and -53.5% by symbols. This pressured prices into the final half-hour, though ES managed to hold most of its earlier gains. Sector flows were defensive: Utilities and Real Estate posted net buys, while Technology (-$1.35B), Communication Services (-$633M), and Consumer Cyclicals (-$403M) saw sharp outflows.
Mega-cap tech was especially heavy, with NVDA (-$320.9M), MSFT (-$297.3M), and AAPL (-$304.1M) all seeing significant sell imbalances. Offsetting this, healthcare names such as LLY (+$78.2M) and MRK (+$26.3M) attracted buy-side demand.
In sum, while headline imbalances skewed heavily negative into the close, ES weathered the selling and finished higher on the day, underscoring that dip buyers remain engaged. The ability to hold above the 6690 area after the MOC pressure suggests buyers are still willing to step in, keeping the near-term bias tilted upward heading into the next session.
Technical Edge
Fair Values for September 29, 2025:
SP: 52.26
NQ: 223.56
Dow: 300.41
Daily Breadth Data 📊
For Friday, September 26, 2025
NYSE Breadth: 74% Upside Volume
Nasdaq Breadth: 60% Upside Volume
Total Breadth: 61% Upside Volume
NYSE Advance/Decline: 70% Advance
Nasdaq Advance/Decline: 61% Advance
Total Advance/Decline: 65% Advance
NYSE New Highs/New Lows: 81 / 25
Nasdaq New Highs/New Lows: 129 / 86
NYSE TRIN: 1.05
Nasdaq TRIN: 1.07
Weekly Breadth Data 📈
For Week Ending September 26, 2025
NYSE Breadth: 50% Upside Volume
Nasdaq Breadth: 54% Upside Volume
Total Breadth: 53% Upside Volume
NYSE Advance/Decline: 39% Advance
Nasdaq Advance/Decline: 40% Advance
Total Advance/Decline: 40% Advance
NYSE New Highs/New Lows: 312 / 107
Nasdaq New Highs/New Lows: 692 / 209
NYSE TRIN: 0.61
Nasdaq TRIN: 0.56
BTS Levels - (Premium Only)
Calendars
Today’s Economic Calendar
This Week’s Important Economic Events
Today’s Earnings
Recent Earnings
Room Summaries:
Polaris Trading Group Summary - Friday, September 26, 2025
Theme of the Day:
"FRYday = Capital Preservation" — Caution was the dominant tone as both PTGDavid and Manny emphasized holding onto the week’s gains. Despite some volatility and multiple trade setups, discipline and patience were the real profit-makers.
Market Behavior Summary:
The session was marked by key inflection levels (SPX 6625 / ES 6678.25 and SPX 6640 / ES 6693.25) and a series of pivot-based time windows.
SPX 6640 acted as a GEX magnet, pinning price action and limiting upside—a level mentioned early and proven critical throughout the day.
Order flow was wonky and indecisive, leading many—including Manny—to stand down from full risk, opting for test accounts or paper trades.
Key Trade Opportunities & Setups:
1. Continuation Long Setup (AM)
Level: SPX 6625 / ES 6678.25
Trigger: Break and hold + clean retest
Targets: ES 6683.25 → 6688.25 → 6693.25
Result: Triggered but failed to convert SPX 6640, leading to rejection. Setup provided valuable tape-reading insight, but no real follow-through.
2. Second Long Attempt (10:00–10:15 ET)
Level: SPX 6640 / ES 6693.25
Trigger: M1–M5 close above + clean retest at 6694–6696
Targets: 6703.25 → 6713.25 → 6723.25 → 6743.25
Result: Another rejection at 6640. Tape looked strong but price couldn’t convert; discipline saved traders here.
John B Trade Highlight
Long stopped out, flipped to short and managed it well.
Great example of adaptive execution and risk management around 0DTE support.
Major Lessons & Educational Takeaways:
"The Clock" – Time-Based Pivots in Action
10:15–10:50 AM LOD Window: Served as the first key decision point, where a long setup was watched but didn’t confirm.
11:00–11:40 AM High: Came in late.
12:00–12:55 PM Low: Arrived early, showing the flexibility of these time windows.
2:00–2:50 PM High: Played out as expected, but failed to convert into a lasting move.
3:30 PM Low: Was watched closely, but volatility faded, likely due to options expiry positioning (THETA burn).
Manny shared this key insight:
“I used to think the center time was the time. Now I wait later in the window—it’s often the final test of balance that offers the best entry.”
On Execution Discipline
Manny emphasized "let someone else break the level—then you ride the follow-through".
The room respected risk, with many opting out of sub-par setups or using sim accounts.
Emphasis on edge coming from structure + timing, not just raw price action.
Community Engagement & Coaching
Manny gave extensive coaching on tape reading, pivot timing, and GEX impact.
Roy, Slatitude, and John B were active in asking questions, sharing observations, and learning from setups.
PTGDavid dropped key resources, including:
XMO Dashboard + PTG University Module
YUMI psychology tweets reminding traders that ego is the enemy.
“You are not the piece that determines the win or loss—you’re part of the system.” – YUMI Wisdom, shared by David
Final Hour Recap:
Despite expectations of increased last-hour volatility, the market remained pinned.
Manny suggested market makers suppressed price under SPX 6640 to let calls expire worthless.
Final takeaway: Risk was low, opportunity was limited, but clarity was gained.
Summary Points:
Key resistance at SPX 6640 was the story of the day.
Several trade setups offered potential, but failure to convert required staying defensive.
Education and discipline shined—with Manny’s guidance helping traders stay sharp and protected.
Clock-based timing tools were a core focus, and many are beginning to "see the matrix."
Quote of the Day:
"It’s not about catching every move—it's about knowing when not to trade and preserving edge." – PTG