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Given that (a) stocks have fallen for four consecutive days and (b) there haven't been any clear-cut, obvious catalysts to the pullback, it is probably safe to say that there are "issues" at work behind the scenes. Granted, the decline over the past four days hasn't been severe (the S&P is off just -1.63 percent from its 18-Sept high). And as such, the bulls will contend that there isn't anything to worry about at this stage. However, given that, in the stock market "things don't matter until they do - and then the matter a lot," it is probably a good idea to have at least a cursory understanding of the "issues" at hand - if for no other reason than to protect oneself against something big sneaking up and causing a really serious problem at the corner of Broad and Wall.

Based on the news-flow of late, there are three "issues" that traders and their computers appear to care about at the present time including: Iran, the debt debate, and the taper. So, let's spend a few minutes this morning breaking down these "issues" and getting to the heart of each matter. Frankly, this may sound like a boring exercise. However, it is important to remember that the markets don't like surprises - so neither should you.

Is Iran Really an Issue?

If your first thought was to skip this section because nobody expects any serious trouble out of the blustering leaders of Iran, you may want to think again. While this issue has been largely off of traders' radar for some time now, there were reports that the algo-induced blast up off of the morning lows yesterday was sponsored by comments President Obama made on Iran in front of the United Nations.

According to reports, Obama said that he had directed Secretary of State Kerry to pursue talks with the Iranian government regarding all things nuclear. The President's comments, which sparked a ten point move up in the S&P in less than thirty minutes and moved the index from red to green, seemed to be interpreted as being rather dovish. Connecting the geopolitical dots, it should be noted that Obama's words followed remarks from new Iranian President Hassan Rouhani, who is seen as having a mandate to negotiate a deal that would allow the country to produce nuclear energy for peaceful use - and not for military purposes.

The bottom line here appears to be that if the algos care about comments on this topic, perhaps traders should as well.

The Fed's "Issues"

Traders can't be blamed for doing a little head scratching on the subjects of Fed policy, the taper, and/or the new Fed Chairman. All three issues have moved the markets of late - in both directions - so doing a deeper dive into these "issues" would seem to be appropriate.

On the topics of Fed policy and "the taper," StreetAccount said it best yesterday. Here's an excerpt: "As the post-FOMC rally lost momentum late last week, there was some focus on worries that policy dynamics have entered into a vicious circle where the Fed cannot even get comfortable about dialing back some of its policy accommodation without wreaking havoc on the market and choking off the recovery, let alone begin the normalization process. There were also concerns about the credibility of the Fed’s thresholds following the downward revisions to both the unemployment rate and fed funds forecasts." Well said.

One of the real problems right now is the idea that there may be a leadership vacuum developing due to the uncertainty surrounding who will head up the FOMC come January. The fact that Fed officials have not been able to provide more color on how the decision to taper will be made has been cited as an "issue" in some trading circles.

The bottom line on the issues relating to the Fed is that until the uncertainty is removed, traders may be more interested in taking profits and avoiding headline risk.

Fun and Games in D.C.

Speaking of headline risk, politicians in Washington are known to consistently be a source of algo-inducing comments, rumors and innuendo. In fact, being able to spin a catch phrase intended to incite their opponents may be in the job description. Therefore, whenever Washington is in the spotlight, traders had best be on their toes.

In case you've been living in a cave, the key issue in and around the beltway these days is the idea that the government is slated run out of money in six or seven days. Point number one on this issue is that like the "sequester" deadline, the October 1st date may not exactly be set in stone.

If you haven't been paying much attention to this issue, first of all, no one can blame you as just about everyone in America has had it with the games played by our elected officials. But the latest is that after the House passed a bill this week that has not a chance in heck of becoming law, the Senate is now messing around with their own bill.

Without boring everyone to tears as to what could happen when and where, the bottom line on this "issue" is that just about everyone on the planet expects something to get done - at the last possible second, of course. In short, the political stakes of being seen as the bad guy are too large. Oh, and this is just the way that Washington plays the game.

So, while there isn't a lot of selling being done based on the fears of what might or might not happen in Washington, one could also conclude that there isn't a lot of buying going on right now either. And this is something that could easily continue until these "issues" are resolved.

Turning to this morning... Worry seems to be the watchword in the markets this morning. After four straight losing sessions, apparently traders around the world are now focusing on the "issues" facing our markets (the debt debate and the Fed). Global markets were soft overnight and U.S. futures are now pointing slightly lower ahead of the report on Orders for Durable Goods.

Positions in stocks mentioned: none

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