Weekly Raid #17 - The downgrade edition
Good Morning traders!
Last night after the close Fitch downgraded the US from AA+ to AAA. Now that doesn’t really mean much but the SPY 0.00%↑ did react with a sell off and is now bouncing back.
There are still a lot of people calling for a collapse and that we are way overextended, and I would like to be clear that I think we are, but I can’t see us having a very meaningful selloff until most of retail is back calling for ATHs. I could be wrong but that usually is how it happens short of a one off event.
That did however get us a spike in the VIX. But I am not sure that it will stay elevated from it. As I heard it put yesterday “Fitch is the discount store of ratings agencies”, and I got a chuckle out of that.
Plus we are, at least for the time being, the world currency so a downgrade doesn’t affect that yet.
On to today
We are sitting at 255ish on TSLA 0.00%↑ which has been a source of bounces in previous sessions. That said this will be the 3rd attempt at the level from above so I am not sure I would take it. I will be watching for options flow and buyers to show up on the tape so confirm a move or not. Under 255 with any force and I could see us hitting 240 area give or take a few handles.
Watching HD 0.00%↑ for a pull back into the 315-320 area for a potential trade. We are pretty extended up here on light volume and the last years value area is pretty balanced.
Finally some Crypto in the mix, I am looking at Bitcoin $BTC. It broken the 30k level and keeps bouncing off of 29kish and I am watching for the to break. The only off shot here is if the SEC comes out with some miracle ruling. Through 29s I think it could be a pretty quick trip to 26’s. And down there I would start to become interested again.