I have to admit that I'm a bit concerned that it could get really ugly, but on the other hand I'm wondering if the huge drop last week was solely in anticipation of this. Unfortunately I covered my short positions last week and dabbled slightly in shorting the inverses (QID, SKF), thankfully only in small amounts!
This downgrade is WAY overdue and the market was way overdue for a correction.....and honestly I think it's still bloated. Now comes the hard part of when to double-down on my severely bruised GLW position! LOL!
Relative to your post, a couple of financial commentators said that the sell-off in Wall St. last week was in anticipation of the S&P downgrade and that this anticipation was as they said, "baked in into the cake." S&P had previously said there would be a downgrade if the debt ceiling crisis wasn't resolved satisfactorily-----which it wasn't. It was a charade.
Although, none recommended buying on Monday morning.
Wall St. always goes extremes in both buying and selling, so I would sit tight and see how this plays out.
Also, keep in mind the Federal Reserve will be meeting on Tuesday and Wednesday of this week.