Market Reaction to Standard & Poor's US DOWNGRADE?

Market Reaction to Standard & Poor's US DOWNGRADE?

  • Down 10%

    Votes: 33 21.0%

  • Up 10%

    Votes: 12 7.6%

  • Down 7%

    Votes: 7 4.5%

  • Up 7%

    Votes: 3 1.9%

  • Down 5%

    Votes: 16 10.2%

  • Up 5%

    Votes: 2 1.3%

  • Down 3%

    Votes: 18 11.5%

  • Up 3%

    Votes: 14 8.9%

  • +/- 2%

    Votes: 52 33.1%
  • Total voters
    157
  • Poll closed .
Quote from Random.Capital:

This is post facto curve fitting at its worst. Unless there is a way to predict what the extreme will actually be, following that advice with meaningful amounts of capital WILL wipe out the trader.

Completely irresponsible reportage.
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No one can predict what the extreme will be. That's a lost cause.

The main problem with this indicator is the small sample size (7) and the lack of walk forward or real-time testing. However, there are other extreme mean reversion strategies that meet those criteria and have been profitable. Of course, they aren't always profitable--nothing is.
 
US is finished. God is our last hope. :) :(

Perry: Turn to God for answers to nation's woes
Forbes - Thomas Beaumont, April Castro - ‎9 minutes ago‎
HOUSTON -- Texas Gov. Rick Perry is asking Christians to turn to God for answers to the nation's troubles as he holds court over a national prayer event attended by roughly 30000 people.
 
Quote from shortie:

US is finished. God is our last hope. :) :(

Perry: Turn to God for answers to nation's woes
Forbes - Thomas Beaumont, April Castro - ‎9 minutes ago‎
HOUSTON -- Texas Gov. Rick Perry is asking Christians to turn to God for answers to the nation's troubles as he holds court over a national prayer event attended by roughly 30000 people.
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I thought the Messiah was in the White House?
 
Quote from MKTrader:

I thought the Messiah was in the White House?
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More recently the claim that Jesus was black has gained some currency among African American religious movements, either as a historical hypothesis often rooted in Afrocentric doctrine or as a symbolic statement of Black Pride. Groups such as Black Hebrew Israelites claim that black people are descended from Israelites and that therefore Jesus was black.[12]

from WIKI.
 
The reaction on Monday really depends on whom knew what last week as far as the downgrade is concerned.

Timeline:

Official report came out when AH session was over so the market reaction can't be known for sure before Sunday session

But the rumors were rampant last week:

"The S&P 500 climbed as much as 1.5 percent in the first five minutes of trading yesterday "(they mean Friday Open)" before turning lower as speculation swirled through the market that S&P was preparing to strip the U.S. of its AAA rating for the first time."

"After being alerted to that, S&P lowered its calculations by $2 trillion and then relied largely on judgments about the U.S. politics to support the downgrade, the person said. The Treasury was presented with the S&P analysis shortly before 2 p.m. yesterday "(Thursday 2pm Eastern?)"."

Looks like S&P decided on the downgrade some time during the day on Thursday Aug 4th.

Basically, the info could have leaked out on Thursday when the market dropped 5%. I believe there was also news about Italy that did not help. But it is quite possible that somebody knew something about S&P downgrade and was dumping on the unsuspecting traders. :(

The market does not just drop 5% on a rumor. It appears that the rumor was quite credible (and it indeed was) to cause the massive stock market losses.

The bottom line is that much of S&P news has been priced in by Friday close. In fact there were only a small drop in SPY (-0.5%) during AH when CNBC was openly reporting "the rumor".
 
everyone knew this was coming and morons bought the market anyway, you are all screwed if you're holding over the weekend.

yes, the market is rigged, yes this information was given to ballers who are going to make a killing off the market crash. S&P, moodys, etc etc are all criminals. but i could care less, lets make some $$$$ on monday
 
"In fact, according to a new note from Birinyi Associates, it’s fairly rare for a correction to turn into a bear market:

Since 1962, there have been 25 corrections greater than 10% during bull markets. Nine of these instances became bear markets. Historically there is a 64% probability that this is only a correction and not the start of a bear market.

The average correction is 13.2% and lasts 118 days. If this market follows the pattern of the average 10% correction, the S&P 500 will bottom at 1,184.02 on 8/25/11.

Birinyi, which has been relentlessly bullish throughout, continues to be so:
Looking anecdotally at 10% corrections, the current market worries about the economy are similar to many of the past corrections. Our view remains that we are in a long-term bull market and in long-term bull markets you have downdrafts. Everything that we’ve built our bullish case on continues to be present."
http://blogs.wsj.com/marketbeat/201...ket-correction-what-now/?mod=google_news_blog



--Abby Joseph Birinyi Out :cool:
 
I haven't read all the posts so I don't know if this has been posted yet.

"When Canada lost its AAA rating in April 1993, for instance, the country's stocks gained more than 15% in the subsequent year. The Tokyo stock market climbed more than 25% in the 12 months after Moody's downgraded Japan in November 1998."
 
Quote from ForexForex:

I haven't read all the posts so I don't know if this has been posted yet.

"When Canada lost its AAA rating in April 1993, for instance, the country's stocks gained more than 15% in the subsequent year. The Tokyo stock market climbed more than 25% in the 12 months after Moody's downgraded Japan in November 1998."
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not bad!


"...chief market strategists at 13 big banks forecast the S&P 500 will rise 17% through Dec. 31, the average estimate in a Bloomberg survey taken Friday. .." http://www.thestreet.com/story/11212381/1/rating-cut-stock-slump-trigger-buy-signal.html
 
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