Debt default averted, Stocks keep plunging
Senate passed the debt ceiling bill today with a bi-partisan vote 76-24. This takes off the threat of US default on its debt obligations and possible credit downgrades which may still happen. The world will live and US markets will live ,because today is August 2 , 2011 and if this bill had not passed, it would be another catastrophe we all have endured.
The stock market has been falling since July 22nd 2011 and now the SPX is violating its previous lows set in June 2011 at 1265 levels. This is an area of great concern for the market. SPX is now trading below its 200 day moving average and well below its 50 day moving average. Here is a video you can watch which outlines the situation:
The market is extremely oversold and the reversal is bound to happen here sooner or later. It cannot keep going down straight forever. But would that be a bottom you can trade? Not unless there is a spiked bottom and a very sharp reversal a condition seen many times in such settings since 2008.