The downgrade is meaningless. Japan's market went up after theirs. Long term rates affected? Go ahead and tell me how, if Ben is buying them? Japan's yields did raise, so maybe you jump in line and short bonds. Everyone who tried is already dead. This is about Italy and Europe. Nobody cares about downgrade. Have you seen the gold market?? Uh... This has been priced in since they began "purposefully" destroying the dollar. China will stop or they will continue. No reaction on downgrade. Italy.... big reaction. They clean this up, up big is possible. If not expect more liquidity runs.
I think if we get a spike down premarket or first hour of trading Monday its a great buying opportunity. If you're not sure buy Canadian ( we still have AAA ratings ). The more severe the drop the better the opportunity. The analysts believe fall earnings will rally the market, plus normal seasonality.
Bomb S&P I guess an investigation is underway to find out any rape, kids sex abuse or.... by S&P top rated employees. That would solve the problem
So I am looking forward to seeing another downgrade to AA-. I think this is an easy job for Tea party
S&P fire back with an awesome salvo: http://finance.yahoo.com/news/SampP...tml?x=0&sec=topStories&pos=main&asset=&ccode= "The whole 2T thing? The admin was bitchin' about our numbers so we said WTF, even if we use yours, you're still toast. Then they go on and on about this 'error' and how we won't change our minds in spite of it. Fact is, even assuming we were wrong (we're not), the thing still reeks." (not an exact quote) 'Bout time for the administration to try to pull in Moody's or Fitch. Wonder where they have the most clout?
Agree. I'd bet the exact conditions that the OP cited were in existence in the days prior to the Crash of 29 and 87 as well. IOW, oversold markets, on occasion, lead to crashes.
of course, there is not sure thing. but now is not the time to Short. VIX was 39 on Friday. does anybody seriously believe it is going to 50, 60, 80 any time soon? in the last 25 years there have been only a handful of cases when VIX went to 40. **edited** I was wrong about 87, the article only looks at data since 94 (how convenient) **edited** but you are still likely wrong about 87. as i recall the market was never oversold by any measure up until the crash itself **edit** actually i was wrong about 87. the market was down >10% from the Highs by the fateful Friday when every RTM player went Long just to be crashed the following Monday
Denner is doing a fine job of scaring the passengers. i will add that in 1987 the market lost ~15% in 2-3 weeks by Friday close, only to really crash on Black Monday. as a comparison, we lost ~11% in 2 weeks going into this weekend :eek: in both case VIX was ~40 by Friday :eek:
Before 2008, there was only one where it went to 50. If you'd played a heavy "oversold" on the 2008 tag of 50, you would have been prison-raped by an unsanded, ungreased two by four. I'm all about taking gambles. Just don't do it in a way that leaves you dead if you're wrong. If the market decides to react strongly to this downgrade - in either direction - there isn't a stop loss in existence that will get you out in time. This is as good a time as any to short. It's also as good a time as any to go long. Time will tell which move is right.