Stocks have been split—the Nasdaq is up for the week, but the S&P 500 is down fractionally.
And the CBOE Volatility Index is up slightly this week, but well below the highs it reached in June.
Why does the Street continue to believe a deal will be struck? Speaker Boehner, in a brief press conference, made it clear no deal is imminent.
President Obama has resorted to taking a walk around the White House neighborhood to get lunch (seriously), where he remarked to reporters that he was "happy to have negotiations with the Republicans and Speaker Boehner," providing the government is reopened.
But traders believe the positions of both sides are not as entrenched as they seem.
Traders passed around comments yesterday between Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Rand Paul (R-Ky.) that were apparently caught on a live microphone though neither one realized the mic was hot.
"I just go over and over again; we're willing to compromise; we're willing to negotiate," Paul said to McConnell.Another reason for optimism: the tone of the debate has shifted from shutting down Obamacare to spending issues, to what Greg Valliere has called "a down payment on entitlement and tax reform."
(Read more: A tweet underscores why Washington is stuck)