This has to be one of the most telegraphed moves by the ratings agencies in a long time. S&P finally did what most feared, downgrading US debt rating. Based on the moves in the other smaller markets in the Middle East over the weekend, it looks like there will be weakness overnight.
The fundamentals don't change because of a ratings downgrade, the US Treasury market is still the most liquid in the world and the safe haven when markets tank. In a perverse way, any short term dollar weakness caused by this debt downgrade would be bullish for the US stock market.
After the big down move we saw last week and the surge in volatility on Thursday and Friday, the market is close to a short term low. On Monday morning, retail money will be bailing out after freaking out over the weekend doomsday headlines about this debt downgrade. I believe that will be the final capitulation of this move. If we get a gap down, that will be an exquisite buying opportunity for a swing trade.
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9 comments:
I hope your right. I'm getting pummeled.
We won't get much bounce for awhile. Markets should continue to carene on down.
sorry careen
Der Spiegel just announced that german govt is in favor of massive bond buying for Italy and Spain 4:47 EST.
Owl,
What do you think the S&P will be at mid wk?
This market has no bid
1220. I think we're gonna have a strong up move intraday on this gap down open.
Do you still think good for the gap bounce?
The market is a lot weaker than expected. I still expect a strong upmove to happen soon, but the timing is tricky in this crash like environment where fear is overriding everything.
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