No stocks goes down forever. You are going to get a oversold bounce. After the S&P rallied over 50 points, this POS should at least should rise a few dimes. But the downtrend continues until you can break and hold above $6 once again.
As to the general markets, this feel-good relieve rally is thinking that a deal will be done between the House and Senate this weekend. It is my hunch that it will NOT be.....partly because of my belief that politicians wrangle for everything - none wants to concede to early, things never gets done ahead of time.....a deal only gets done right at the deadline when they are forced to.
Here's how I think it will play out.....The markets will be surprised if the debt ceiling deal is NOT reached by Oct 17. Then the sky-is -falling-down mentality will descend upon Wall Street. You are probably looking at 1000 point Dow drop. It will be the shakeout I think that will be coming.
The real debt ceiling deadline, my friends is not Oct 17. The Treasury can still shift money to make ends meet. The real deadline is Oct. 30 when the government will absolutely have no money because Social Security checks must be sent out on Nov. 1. (basically the government will be in technical default).
nerdy: That's a reasonable post. What you left out is the Feds pull in, in tax revenues that are about 10 times the money required to service the debt every month. That equates to you either service the debt or continue to provide payments to the entitlements, military and essential services. As they are legally required to fund certain accounts (not completely), military, FAA, CDC etc. the entitlements and other non-essential operations will take the hit. What will dry up is funding for the discretionary funded accounts and special congressional and executive support services, not to include The Secret Service and executive operational budget.
They have more than enough to pay the military and essential services just not the entitlements.
All types of undesirable things can happen but not servicing the debt just isn't one of them.
Its just like running a business, hard times require hard decisions to ensure that everything doesn't go down the toilet.
I'm trying to keep this is a nonpolitical post. Just the facts. I hope I succeeded.
Jim Long and calm