Before the Open (Jul 14)

Posted on by Jason Leavitt

Good morning. Happy Thursday.
The Asian/Pacific markets closed mixed; there were no big winners or losers. Europe is currently suffering moderate, across-the-board losses. Futures here in the States point towards a positive open for the cash market.

After yesterday’s close Moody’s put the US’s debt rating on watch for a possible downgrade due to the possibility it won’t be able to make interest and principle payments on its bonds if the debt ceiling isn’t raised. Even though Moody’s has no credibility because they partially caused the financial crisis, this makes sense. The US has more debt than any country in the history of the world, but because it can print money, it has always paid its bills on time. Failure to pay wouldn’t just result in seniors not getting their social security checks, it could result in the government missing an interest payment which would prompt a downgrade of our debt which would increase the cost of borrowing money in the future which would be disastrous (how’s that for a nice run-on sentence).
After the announcement was made, S&P futures dropped a quick 10 points but those losses have been recaptured plus a little extra.
Swing trades have been nonexistent the last week. We got a great move up and now a decent move down and several large gaps. I’ve been laying low all week because I haven’t seen any good risk/reward set ups. Waiting is tough, but it’s wise when the coast isn’t clear and there is no dominant near term trend.
I’d still consider the market to be trending up on a long term basis. On an intermediate term basis (since the beginning of the year), the market is neutral and range-bound.
For now I’m content to watch and wait for better set ups. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
yesterday’s sector performance
this week’s Earnings
this week’s Economic Numbers

0 thoughts on “Before the Open (Jul 14)”

  1. Nobody has made any sense contending that a default is imminent. The U.S. Treasury will collect $200 billion in August. Bond interest is $30 billion per month. How can there be a default unless they use the money for something else?
    Thank goodness for Moody’s. What would we do without them telling us that the U.S. is broke? They also haven’t explained to my satisfaction how borrowing money to pay your interest is sound. They downgrade you if you don’t borrow money but keep you at AAA if you do borrow to pay it.
    I guess some of us are just not smart enough to work for a ratings agency or the government.

    2. they are rating the default probability of our debt. if we can continue to borrow to service the maturing debt, the existing debt is safe. it’s that simple. they are not rating our economy or anything else. it’s not their mandate.

    1. Thanks for that RichE
      and i read the info on it
      however i dont use volume when daytrading the indexes
      it is not important to me how many people are trading or no of contracts ect–vol
      but it is important to me if people are buying selling on the up/down tick
      ie bid or ask–hence the tick chart
      its more a chart of buy sell presure– are buyers willing to buy at the ask price
      or sellers willing to take the bid price

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