2025 Government Shutdown 1st Week - Who’s Buying Retail or Smart Money?

On October 1st, as the government shutdown began, the S&P 500 broke above the 667 level and climbed to a new all-time high of 672—a 0.75% gain. While headlines celebrated the bullish breakout, the more important question is: who’s actually fueling this move?

A deeper look at the chart shows rising price action supported by an uptick in OBV, typically signaling broad participation. Yet our custom Market Energy indicator paints a different picture. Despite the breakout, internal energy declined—suggesting that momentum may be fading beneath the surface.

This divergence points to a possible scenario where institutional players are quietly distributing into strength, while retail traders chase the rally. It’s a textbook case of price masking exhaustion, and a reminder that surface-level momentum can be misleading.

In Friday’s session, the S&P 500 extended its highs early on, but starting around noon, price action reversed alongside a drop in OBV and Market Energy—culminating in a doji candle on the daily chart. Heading into the new week, if bulls can push decisively above 670, a retest of the highs remains on the table. However, if price stays below 669, we may see a pullback toward 667, 664, or even 661.

Disclaimer:

I am not a licensed financial advisor, and the information provided is for educational and informational purposes only. It should not be considered financial, investment, or tax advice. Please consult with a qualified financial professional before making any financial decisions.