http://seekingalpha.com/article/254094-2-key-dates-that-could-rout-stock-markets-march-4th-and-25th?source=dashboard_macro-view

With things going so well for the US stock market and some other stock markets, it's a good idea to keep an eye out for events that could change the expectations that support market prices. Two dates in March could possibly present events that could be problematic for stock markets.

March 4th is a deadline for the US Congress to pass a budget. That matter is highly contested. If it does not pass, and there is a temporary government shutdown, the market reaction could be strongly negative. The degree of market reaction is probably elevated by the budget problems and legislative battles ongoing in many states, and the exceptional protests of budget trimming that is going on right now in the state of Wisconsin.

March 25th is the date that the European Union is supposed to decide if and how to provide support to ailing credit markets there.

Failure on either matter by approximately those dates could spell trouble for stock and bond markets.

click to enlarge

This chart shows the monthly price performance over the past three years for US stocks: (SPY) in black, European stocks (VGK) in dashed red line, Japanese stocks (EWJ) in dashed blue line, emerging market stocks (EEM) in dashed green line, non-US developed markets local currency sovereign bonds (BWX), including Japan as well as Europe, in solid purple, and US aggregate bonds (BND) in solid gold.

VGK and BWX suffered in the prior two periods of great concern about European debt. That might be expected again if the outcome of the EU deliberations are not convincing.

SPY, EWJ and EEM also suffered in the first big set of concerns about European debt, but sailed past the second round of concerns without too much trouble. A third round of EU debt trouble could be unsettling to markets.

SPY could well be expected to react negative if the March 4 Congressional budget deadline goes by with a good resolution. Even if they do pass a resolution, there will likely be major factions that are highly disappointed -- could those create protests like we have now in Wisconsin? That wouldn't be good for the stock market.

Expect the Unexpected:

There are so many things that have happened in the past few years that most people would have said were just not possible, but they happened.

One looming question is whether the type of public protests that began in the Middle East, and which have been referenced in the Wisconsin protests, have the potential to evolve into similar protests in Washington DC. The US stock market does not have experience within the lifespan of living investors for anything like that. Some sort of strong market reaction is possible in that event.

March 4th could be as hard on stock markets with a budget that some groups find unacceptable, as it could be if there is no budget at all.

We certainly hope both March 4 and 25 pass without much notice, but are on alert that they might not.