An hour and half before the debt ceiling is raised by $2 Trillion+ Asian markets will open higher followed by the US markets tonight when the futures markets open! Going to be one heck of an opening tomorrow! 3%+ RALLY in all indexes!!!!
Even if the debt ceiling is raised, it doesn't solve the debt problem. If we do see a bounce tomorrow, it is probably a good area to short european indices (EWI, EWP) as the "fear" focus switches back to europe again.
I totally agree it doesnt solve anything that is why I continue to have a bearish outlook on this entire economy, I have been saying for months that the debt ceiling should not be raising and that spending cuts should be pushed through immediately.
Jim Abrams, Associated Press, On Sunday July 31, 2011, 10:16 am EDT WASHINGTON (AP) -- Senate Republican leader Mitch McConnell said Sunday that negotiators were "very close" to sealing a deal that would cut spending by some $3 trillion while averting the first federal default in the nation's history. McConnell, appearing on CNN's "State of the Union," said he hoped to soon be able to present to his fellow Republicans an agreement "that they'll consider supporting." That agreement would include raising the debt ceiling through next year's elections in two stages and creating a joint committee of members of Congress that would look at tax and entitlement reform. Democrats were more cautious in saying that the end of weeks of bitter debate was almost over. Sen. Chuck Schumer, D-N.Y., a member of the Democratic leadership, told CNN that while "there is no final agreement," there was a sense of relief that the two sides were finally working on a compromise plan.
I doubt very much that it will be a particularly interesting market day. Expectations have been all along that a "deal" would be reached before anything serious happened. Trade it like any other day...