What's Changed Since Last Year's U.S. Downgrade?
Candy Matheson | Aug 22, 2012 12:56PM ET
What's really changed since Standard & Poor's downgraded the U.S. credit rating on August 5, 2011?
One year has passed and the SPX has gone from a low of 1074.77 on October 4, 2011 to a high of 1426.68 yesterday (Tuesday), as shown on the Daily chart below. A double top has formed at major resistance.
Looming Cliff
The credit rating has not been upgraded. The Fed also downgraded the economic outlook at its meeting last August as mentioned last year's August 9 U.S. National Debt continues to rise (unabated) to all-time highs each second. The Fiscal Cliff looms.
Taking Profit
Who is convinced that economic and fiscal conditions have improved since then? The only ones, so far, have been the buyers above the yellow arrows. No doubt they'll begin to take profits at current levels and re-think their positions after the next FOMC meeting in September. A drop-and-hold below June's lows of this year would confirm that its sentiment has changed.
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