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The Market’s in Downgrade Denial - Here’s What to Do

TheoTrade, LLC
43.8K subscribers
2.3K views 4 months ago
As we approach the close today, one might have assumed a much bigger response to Moody's downgrade of U.S. debt. We saw the S&P 500 notch a lukewarm 0.13% decline. Historically, though, the response to such downgrades has been much bigger the day of the downgrade and the coming weeks and months after. On August 5, 2011, for instance, Standard and Poor's downgraded U.S. debt. The market's response was immediate with a 6.59% decline the next day. The next downgrade from Fitch came on August 1, 2023 and the big index declined 1.55% the next day, 5.27% over the next week, and a full 10.33% over the next three months. In comparison, today’s 0.13% decline is downright muted. So we’ve got to ask “why?” Is it possible that the market has become so accustomed to debt and deficits that we’re now immune? Let's talk about today's response, what this means in the coming days and weeks, and how we can prepare… TotalTheo® Unlimited Monthly Streaming: ht …...more
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The Market’s in Downgrade Denial - Here’s What to Do
90Likes
2,303Views
May 192025
As we approach the close today, one might have assumed a much bigger response to Moody's downgrade of U.S. debt. We saw the S&P 500 notch a lukewarm 0.13% decline. Historically, though, the response to such downgrades has been much bigger the day of the downgrade and the coming weeks and months after. On August 5, 2011, for instance, Standard and Poor's downgraded U.S. debt. The market's response was immediate with a 6.59% decline the next day. The next downgrade from Fitch came on August 1, 2023 and the big index declined 1.55% the next day, 5.27% over the next week, and a full 10.33% over the next three months. In comparison, today’s 0.13% decline is downright muted. So we’ve got to ask “why?” Is it possible that the market has become so accustomed to debt and deficits that we’re now immune? Let's talk about today's response, what this means in the coming days and weeks, and how we can prepare… TotalTheo® Unlimited Monthly Streaming: https://theotrade.com/all/ TheoTRADE 2023 Live Event "A Trader's Paradise" https://go.theotrade.com/23-2/ Sign up for the Trading VIX Options Course: https://theotrade.com/vol/ The Next Big Short Class (Risk Twist Spread) https://theotrade.com/twist/ Weekly Options Trading Advantage Class https://theotrade.com/wo/ Learn the Tetrapod spread in the Secret Weapon to Trading Options on ETF's Class: https://theotrade.com/pod/ Consistent Intraday Strategies and Setups Class https://theotrade.com/day/ High Probability Trading with In Out Spreads Class: https://theotrade.com/spread/ Day Trading Nasdaq Futures Class with Tony Rago https://theotrade.com/nq Don't have thinkorswim? Open a TD Ameritrade Account and get the thinkorswim platform for free here: http://www.theotrade.com/tdameritrade Guide to Getting Short and Collecting Income: https://theotrade.com/getshort/ Join TheoTrade: https://theotrade.com/total Get Market Cliff Notes delivered to your inbox each trading day: https://theotrade.com/cliffnotes Get more free videos like these delivered to your inbox each trading day: https://theotrade.com Get free thinkorswim® tutorials: https://theotrade.com/theotradetutori... Subscribe to our YouTube channel:    / theotrade   Follow TheoTrade on Twitter:   / theotrade   Become a fan of TheoTrade on Facebook:   / theotrade   Follow TheoTrade on Pinterest:   / theotrade  
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TheoTrade, LLC

43.8K subscribers