Whether or not S&P were right in their call, just the fact that a group has taken such ballsy measures isn't going to help sentiment.
I was banking on a fairly flat open on Monday after the S&P500 closed at parity, but having seen confirmation of the downgrade that was feared throughout Friday night's trading, I can't help but wonder how many on our market are going to sell just out of fear of the US markets collapsing on Monday night. They might not have any fundamental understanding of what the action taken by S&P means, but even just the term 'downgrade' is always going to strike a bit of fear in the minds of the ill-informed.
I figure we are going to sell a sell off tomorrow, for no other reason than the market being scared of what could happen in the US. Some would rather be out tomorrow, than run the risk of holding over Monday night and awakening to another large drop overseas.
We won't fall nearly as much as we did on Friday, but a 1%-2% drop wouldn't surprise me. Our markets are hanging onto some critical support by just a thread right now, and this could be what tips them over the edge.
