Why hold a short position in the S&P 500: Part 2

On March 28th, 2011, a post entitled: Why hold a short position in the S&P 500

I was about 9 days early on the call, however, since April 6th,  the markets have been rolling over.  Today, we go a strong drop in the morning as S&P put United States AAA debt rating on Watch with negative implications. 

With its mounting debt / deficit, the US economy requires a lot of fixing, however,  the threatened government shut down two weeks ago, a lot with the larger debt ceiling argument coming down the pipe, S&P determined there is potential for additional risk associated with US debt. 

If you couple the political risk with QE programs, and the dollar decline the past year, it is obvious the world is changing dramatically around us. 

Have a look at Gold, being ever so close to the 1500 level.  The number of stops (for Shorts) that are placed above this level is likely massive.  Breaks about this will send gold to 1525 /1550 in short order.