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MoneyShow's Jim Jubak analyzes the current market action and wonders whether the prevailing sentiment can last until the earnings season kicks in.

For the week ahead, well maybe the next two or three weeks ahead, we're in a kind of race to see what ends first, whether it's the market's complacency about the government shutdown and the debt ceiling battle, or whether it's the government shutdown and the debt ceiling battle itself.

Right now it looks like the market is pretty much assuming that this is going to be over in like a week, it's not going to have a whole lot of effect. It's not going to lead into some kind of bigger battle over the debt ceiling. In fact, it may mean that the debt ceiling battle itself will be resolved fairly easily, but you've got things like on October 2, you had the ADP research numbers on jobs. Now, there won't be a government report this week, the government is shutdown, so the September jobs numbers, which were supposed to come out on Friday, October 4, won't come out, so this is the only jobs number we have for September, probably for a while.

The ADP report showed 166,000 jobs being created by the economy. That was lower than economists expected. They'd expected 180 or so. The market did indeed move lower on that, but after hitting a low around 1018-1020, it proceeded, pretty much, to go up all day and finish the day down a little less than two-tenths of a percent. Not a big move, considering all that's happening.

So, basically, I think what you're looking at is a market that's willing to look past these problems, to say, "Well, what we've got coming up is earnings season. We think earnings season is going to look pretty good. The last five in a row have looked pretty good, so we're expecting the market to move ahead." The thing that would upset this would be some actual events that tell us that this thing is not going to be over in a week or so, and that the debt ceiling battle is, instead of getting sort of resolved because we're not going to fight these things all over again, right, is getting worse.

So, really, we've got a market that pretty much has decided that the best of all possible worlds is going to come true, and if it does, I think the market is well placed to go up in earnings season, and if it doesn't, we've got a lot of down side below us.

This is Jim Jubak for the MoneyShow.com video network.

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