• The Collins curse is on for tomorrow.

"One last thing."

-- Lt. Columbo

Hide all the women and children because Tim "Not Judy or Phil" Collins will be filling in for me on Friday.

The means the market jinx is on for tomorrow.

Beware bulls and Katie bar the doors!

• You will be in the able hands of Tim Collins tomorrow.

I am making an early exit as I prepare for my trip to South Florida.

Thanks so much to everyone for reading my diary this week and enjoy the balance of the week.

You will be in the able hands of Tim "Not Phil or Judy" Collins tomorrow.

See you back on early Monday morning.

• A lot of scary high drama will be in abundant supply in the week ahead.

As I mentioned in this morning's opening missive, President Obama will be leaving for four days on Sunday. 

For now, nobody seems willing to compromise. (My Washington, D.C., contacts still say there is limited communication between the parties at this time.)

While several House Democrats are willing to repeal the medical device tax (something that House Republicans have demanded), Harry Reid just rejected such a proposal.

Stated simply, the Democrats want to crush the (Tea Party) Republicans, and the Republicans want to crush ObamaCare.

While there will likely be a last-minute resolution on or right before the Oct. 17 deadline and there will not be a technical default, it is clear that there will be a lot of scary high drama in the week ahead.

• Reid's rejection being the catalyst.

Break in:

• "Senate Majority Leader Reid Rejects Proposal to Repeal Medical Device Tax" (Dow Jones)
• "Reid Calls Proposal An Action of Desperation" (Dow Jones)

And with this news, I am taking off my SPDR S&P 500 ETF Trust (SPY) long rental/hedge (at $167.55).

I am staying in motion, and my quick opportunistic trading approach is not for everyone.

• Today's average price is $483.40.

My average cost on my Apple (AAPL) long rental is $483.40 today. (I sold my previous long for $481 on Tuesday.)

• Via a long SPY hedge purchased at $167.

I am buying SPDR S&P 500 ETF Trust (SPY) at $167 as a hedge against my short book and moving back to a market-neutral position, as I prepare for my road trip.

• That is not to say that there won't be trading opportunities on the long side over the next three months.

As I stated in early August, I continue to believe that the S&P 500 has topped for the year. (Note: I had looked at a 1710 top, and it rallied 20 handles higher that month.)

That is not to say that there won't be trading opportunities on the long side over the next three months.

• I purchased more shares at $483.

I added to my Apple (AAPL) long at $483.

• I try not to take a long-term lease on double- and triple-leveraged ETFs.

A subscriber questioned why I would modestly pare back my ProShares UltraShort Russell2000 (TWM) and Direxion Daily Small Cap Bear 3x Shares (TZA) longs yesterday and then buy them back $0.10-$0.20 higher today.

Double- and triple-leveraged ETFs are trading sardines not eating sardines. I trade them and try not to take a long-term lease on them.

That is why.

• Sit on your hands and do as little as possible.

Repeating for emphasis: As outlined in today's opeining missive, sit on your hands and do as little as possible in a market that is newsy and without memory from day to day.

• My price is $13.10 and lower.

I am biddiing $13.10 and lower on a scale for more Northwest Bancshares (NWBI) this morning.

So you know.

• I bought some shares at $485 for a trade.

I just paid $485 for a small trading long rental in Apple (AAPL).

As I mentioned Tuesday, I believe I made a mistake in selling the shares.

• Here is his take.

The Lindsey Group's Peter Boockvar parses through more economic data this morning:

The important ISM services index for September was 54.4, well below the estimate of 57.0 and down from 58.6 in August which was the highest since December '05. Of particular note after yesterday's ADP report and with no Payroll tomorrow, the Employment component fell to 52.7 from 57.0, a 4 month low that puts it below the 6 month average of 53.4. Business Activity moderated to 55.1 from 62.2 and New Orders fell about 1 pt to 59.6 but is still at a good level. Backlogs were little changed. In contrast to the drop in Export Orders in the manufacturing index, they spiked 7 pts in services to the best level since February (note, 60% of co's surveyed in this index don't have or report export orders). Prices paid were up by 3.8 pts to 57.2 which compares with the 6 month average of 55.0.

Bottom line, the mixed economic message continues only 11 industries of the 18 surveyed seeing growth with 4 experiencing contraction and the balance having no change. The ISM summed it up well by saying "the majority of the respondents' comments continue to be positive; however, there is an increase in the degree of uncertainty regarding the future business climate and the direction of the economy."

• I purchased more shares at $75.40.

I added to my ProShares UltraShort 20+ Year Treasury (TBT) long at $75.40 this morning.

• My favorite long is a tie between Altisource Residential and Northwest Bancshares; my favorite short is a tie between IWM and QQQ.

Favorite long (tie): Altisource Residential (RESI) and Northwest Bancshares (NWBI).

Favorite short (tie): iShares Russell 2000 Index Fund (IWM) PowerShares QQQ (QQQ).

• The pace of firing appears to have slowed, but hiring has not shown equivalent strength.

Initial jobless claims came in under expectations again at 305,000 for the week ended Sept. 28, rising slightly from a revised 307,000 the week before. The four-week moving average fell 3,800, to 305,000, a post-recession low.

Claims earlier in the month were artificially low due to computer-processing issues, which are believed to have been resolved now. If we take the data at face value, the pace of firing has returned to what is considered a normal level, representing healthy turnover in the labor market. While the pace of firing has slowed, however, hiring has not shown equivalent strength.

A recent indication of payroll gain, the ADP survey, showed a soft increase of 166,000 in September vs. expectations of 180,000. This signal won't be confirmed or refuted on Friday, as the unemployment report, which markets pay more attention to, is postponed due to the shutdown. The lack of hiring may be due to a combination of higher rates, uncertainty around Fed policy and political dysfunction denting business confidence.

Challenger job cuts, which tracks layoff announcements, rose 19.1% year over year in September.

Claims data will continue to be released during the shutdown. The Wall Street Journal has a list of indicators affected by the shutdown.

• Via long TZA and TWM and short IWM.

I added to my iShares Russell 2000 Index Fund (IWM) short and Direxion Daily Small Cap Bear 3x Shares (TZA) and ProShares UltraShort Russell2000 (TWM) longs this morning.

• I am adding to the position.

Citigroup (C) has been a laggard and a disappointment.

A recently named Kass Katch, considering the investment merits previously mentioned, I am adding to the position.

My time frame on this is as an investment not as a trade, however, so traders need not apply.

• I shorted more shares at $79.65.

I have added small to my PowerShares QQQ (QQQ) short at $79.65.

• Heads up: It is moving day for me, so no "Early-Morning Market Look" until Monday.

• Take a breath, and put all the nonsense in Washington, D.C., into perspective.

By the rude bridge that arched the flood,

Their flag to April's breeze unfurled,

Here once the embattled farmers stood,

And fired the shot heard round the world.

-- Ralph Waldo Emerson, "Concord Hymn"

During confusing times like these in the investment business, I like to retreat into books or into history in an attempt to deflect and even ignore (even for a brief period of time) the ridiculous systemic issues we face in our country.

My experience is that this sort of rerouting puts it all into perspective.

Ralph Waldo Emerson was a key early American philosopher, poet and writer, particularly known for his appreciation of individualism, self-reliance and intuition. He wrote "Concord Hymn," which was sung as a hymn at a July 4, 1837, ceremony to mark the completion of the Concord Monument, to immortalize the resistance of American Minutemen to British forces on April 19, 1775.

The "Concord Hymn's" key phrase "the shot heard round the world" is now internationally famous for its description of the philosophical importance of the American Revolution. Since then, the phrase has also been used to allude to the importance of single actions in cultural and sporting events. For example the shot that killed Archduke Franz Ferdinand of Austria (which plunged Europe into World War I) was referenced by the phrase.

Baseball's Shot Heard Round the World

Bobby Thomson up there swingin'. He's had two out of three, a single and a double, and Billy Cox is playing him right on the third-base line. One out, last of the ninth. Branca pitches. Bobby Thomson takes a strike called on the inside corner. Bobby hitting at .292. He's had a single and a double, and he drove in the Giants' first run with a long fly to center. Brooklyn leads it 4-2. Hartung down the line at third not taking any chances. Lockman with not too big of a lead at second, but he'll be runnin' like the wind if Thomson hits one. Branca throws. (Sound of bat meeting ball.) There's a long drive. It's gonna be, I believe. The Giants win the pennant!! The Giants win the pennant! The Giants win the pennant! The Giants win the pennant! Bobby Thomson hits into the lower deck of the left-field stands! The Giants win the pennant and they're goin' crazy, they're goin' crazy! Heeey-oh!!! (Ten-second pause for crowd noise.) I don't believe it! I don't believe it! I do not believe it! Bobby Thomson hit a line drive into the lower deck of the left-field stands, and this blame place is goin' crazy! The Giants! Horace Stoneham has got a winner! The Giants won it by a score of 5 to 4 and they're pickin' Bobby Thomson up and carryin' him off the field!

-- Russ Hodges, WMCA-AM radio (Oct. 3, 1951)

While the government shutdown holds center stage today, this date (Oct. 3, 1951) holds a special place in baseball history (as Sir Arthur Cashin mentioned yesterday in his morning commentary).  It was the day (not only on Edgecomb Avenue in the Bronx) but throughout the country that "the shot heard round the world" occurred on the baseball field.

It was Oct. 3, 1951 that Brooklyn Dodgers pitcher (and my buddy/pal/friend) Ralph Branca served up a home run to the New York Giants' Bobby Thomson in the bottom of the ninth inning of the final game of the National League pennant playoffs at the Polo Grounds.

Seeing the ball disappear over the fence, Thomson hopped crazily around the bases then disappeared into the mob of jubilant teammates who had gathered at home plate. The stunned Dodger players trudged off the field -- all except Robinson. No doubt knowing of "Merkle's Boner" 43 years earlier, he watched to be sure Thomson touched every base before he too headed for the clubhouse.

To this day, the shot heard round the world that day is the single most remembered incident in baseball history. I still get goose bumps every time I listen to the television broadcast (the first coast-to-coast live broadcast of a baseball game) by Ernie Harwell and Red Barber and Russ Hodges' radio broadcast (above), which is generally believed to be the most famous sports broadcast of all time.

Following the game, legendary sportswriter Red Smith opened his recap of the game for the New York Herald Tribune with the following lead (I have previously recommended  American Pastimes: The Very Best of Red Smith as a great holiday gift for a friend or relative):

Now it is done. Now the story ends. And there is no way to tell it. The art of fiction is dead. Reality has strangled invention. Only the utterly impossible, the inexpressibly fantastic, can ever be plausible again.

Through my relationship with Sandy Koufax and my involvement in the harness racing business, I met Ralph Branca decades ago. He and his wife became my good friends. (Below is a picture of my youngest son, myself and Ralphie at the Meadowlands Racetrack in 1988.)

It's a pretty good crowd for a Saturday

And the manager gives me a smile

'Cause he knows that it's me they've been comin' to see

To forget about their life for a while

And the piano, it sounds like a carnival

And the microphone smells like a beer

And they sit at the bar and put bread in my jar

And say, "Man, what are you doin' here?"

-- Billy Joel, "Piano Man"

So, take a breath, read a good book or think about some old memories (like Ralphie's pitch) "to forget about life for a while," as Billy Joel instructs us in "Piano Man."

I have this morning taken my own advice.

And I guarantee it will put all the nonsense in Washington, D.C., into perspective.

• J.C. Penney price target is lowered at Morgan Stanley.

Morgan Stanley lowers its price target on J.C. Penney (JCP) from $9 to $6.

• Our government will likely compromise on Oct. 16-Oct. 17, but a taper seems unlikely until March 2014.

Mother, mother

There's too many of you crying

Brother, brother, brother

There's far too many of you dying

You know we've got to find a way

To bring some lovin' here today, yeah...

Picket lines and picket signs

Don't punish me with brutality

Come on talk to me

So you can see

What's going on

What's going on

Tell me what's going on

I'll tell you ya, what's going on

-- Marvin Gaye, "What's Going On?"

• High theatre lies ahead.
• The continuing-resolution and budget issues have merged into one.
• A twelfth-hour compromise on Oct. 16-Oct. 17 seems likely.
• Given data-release issues, a taper is not probable until March 2014.

It is clear that the government shutdown, continuing-resolution and debt-ceiling issues have now merged into one problem that will require one solution.

My Washington, D.C., contacts suggest that there is currently a stalemate, as neither side is yet talking to the other side.

With the debt-ceiling limit not in place until Oct. 17, it seems almost inevitable that the government shutdown could last another 13 to 14 days until an on-the-brink decision is made on the debt ceiling (see outcome No. 4 below).

Thus far, the stock market has meandered, and investors are complacent. While the DJIA and S&P 500 are slightly off their highs, the Nasdaq and Russell 2000 are basically at all-time highs. In other words, to date, the stock market is not placing pressure or forcing action in Washington.

My explanation for the lack of market movement to the downside is that the broad "Bernanke put" seems to have (thus far) protected the markets from much downside.

At this point, President Obama is leaving for a trip on Sunday, and he plans to return about four days later. So, nothing will likely happen during next week.

There are several possible outcomes to break the logjam in Washington, D.C. between now and Oct. 17:

1. A crack in the U.S. stock market could force action. (This is always a possibility.)
2. Boehner blinks. (A small possibility.)
3. A partial solution is offered if the debt ceiling is breached in which either Treasury payments would be prioritized or the president issues an executive order to lift the debt ceiling. (A low probability.)
4. A late-hour compromise on Oct. 16. (The highest probability and likely outcome.)

The consequences of breaching the debt limit would result in a dire outcome. It seems likely that debate will go down to the wire, but a compromise will be made at the last minute.

No Taper This Year -- and Maybe Not Until March 2014

It is important to recognize that the current shutdown will bring a halt to the release of government economic data.

If I am correct that the decision comes close to Oct. 17, the economic data vacuum will make it difficult for the Fed to properly assess the economic condition on a timely basis.

This probably means that a tapering is unquestionably off the table this month and, in all likelihood, off the table in December.

The first opportunity after December is January 2014, but I wouldn't rule out March 2014 as the month that a tapering is initiated.

What Is the Appropriate Investment/Trading Response to the Current Paralysis in Washington?

The market will be heavily influenced by the news over the next two weeks, especially of a government kind.

Neither fundamentals nor technicals hold the key. Stated simply, traders/investors don't control their investment destiny during this period of high drama over the next two weeks.

It is probably a good time to sit on our hands.

Or at least it is time for me to be less exposed.

Why risk hard-earned investment capital in a market that has no memory from day to day and that is so dependent on outcomes that we can only guess and can have little conviction about?

Two weeks from now, in all likelihood, there will be a resolution in Washington, D.C.

And, at that time, we can again refocus on the challenges to sales and corporate profits in the upcoming quarters, which could pose a larger threat than the debates on budget and debt-ceiling issues.