A week ago, Standard & Poors downgraded the outlook for the US. This is not insignificant. The next step is a downgrade of the US' credit rating from AAA. The affect of which will reverberate globally.
Standard & Poor's on Monday downgraded the outlook for the United States to negative, saying it believes there's a risk U.S. policymakers may not reach agreement on how to address the country's long-term fiscal pressures.
"Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable," the agency said in a statement.
Since I had established short positions going into the weekend, the rewards Monday were immediate (see account value below; now more than double its starting value from 2/2/11), and a fortuitous reversal long at the test of the downchannel support line has made possible additional gains as price has recovered all of the recent losses and is once again attempting new highs.
