This week, Republicans and Democrats square off for once and for all on debt-ceiling negotiations. We expect the market to fight through the volatility and push higher, bracing for earnings season. Of course, that is contingent on what we believe will be an eleventh hour deal to end the partial shutdown, move the budget debate to November 15th and avoid a Government default to investors by any means necessary. The Democrats have leverage in the fact that a default could seriously rattle global markets and in the last two years the US Govt has cut spending more than in any other two years in our history. While a default is inevitable- neither side of the aisle is ready to face that reality yet.

Remember – In recent months the wall of worry has built in very similar fashion with the previous sequester debate, conflict in Syria, and Federal Reserve policy. Each time, as we’re seeing today – volatility results from cautious money moving to cash and bracing for a market changing event that not only doesn’t happen, but comes and goes with the next headline.

This morning stocks edged lower in pre-market trading with the Dow(mini) down as much as 110 points and commodities being slimmed down with the exception of Gold and Silver. With additional uncertainty, more seek shelter in these metals. We don’t expect the worry to last long enough to see any substantial bullish move in G + S and are ready for lower lows after negotiations before the major long term shift.

As we’ve grown accustomed to, the political situation has once again greatly overshadowed what should be most important at this time of year – earnings season. Earnings are expected to grow 2% across the board and stable numbers from key industry leaders combined with temporary spending relief will give us a move past 15,500 by early November.