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US credit rating downgrade: The sky has fallen or has it really? – Day Three

All right so all of our prediction of doom and gloom actually came to naught.

Gold futures are up about 60 at 1708 an ounce, crude is 3 dollars at 83 and change and the dollar has only shifted slightly against the majors, helped by the massive bond purchase announced by ECB and the Euro. While the day started with acute foreboding the carnage hasn’t been that bad while Asia closed in the red and Korea had us worried for a while with a 7% dip, the sky decided not to descend this evening. S&P futures are only predicting a 2.5% downward shift at market open when the floor at NYSE opens at 9:30 am on Monday, 8th August 2011. Lots of re-assuring noises by all concerned.

Some analysts are even predicting a late day rally once the initial pressure and stampede to safety dissipates. It appears that despite the furor raised by the S&P downgrade, after the initial reaction in Asia and Europe the American market response is actually going to be quite muted. I guess the talk of a rating agency moving the market were largely over-rated.

And now for the golden question? What is going to happen to crude oil. Are we going to break 80 or bounce back above 90 again in the next two weeks? Comments, reactions, thoughts.

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