Thursday, June 23, 2016
I thought today would be a wait and see type of market on the vote in England. Wrong again. The market has already voted. The Dow soared 230 points today on light volume. The advance/declines were 5 to 1 positive. This should turn the summation index back to the upside. The short term technical indicators are now all pointing higher for the major stock indices. Could this be the beginning of a thrust that takes us to new all time highs? Time will tell but it appears so to me. The only caveat again is the light volume. Markets in Europe rallied as well so it seems those in the know are pretty sure that England will be staying in the European Union. GE was up 3/8 and the volume was good. The recent gravestone doji on the daily candlestick charts isn't panning out. Gold fell $10 on the futures and the US dollar was lower as well. Is this the flight to safety trade being taken off? Could be. The XAU and GDX had slight fractional losses on light volume. The gold shares remain in a trading range. Mentally I'm feeling OK. It appears that we are seeing a worldwide money flow into stocks. Indicators have turned and some of the foreign stock indexes are approaching overbought. The indicators for the S&P 500 still have some room to move higher. It appears that the vote is over before even being counted if we look to the markets for the answer. The VIX had a sharp move lower today as well. There is room to move lower there as well. So unless there is some kind of surprise overnight, higher equity prices are in the near future. I don't have any trades in mind for the S&P at the moment. Perhaps if we get overbought I could try the SPY July puts. But that trade would be at least a week away in my opinion. If the volume remains light, that idea may be worth it. Europe and Japan rallied overnight and I'd expect more of the same tomorrow. They will be counting the votes overnight but it already seems to be a done deal. We'll close out the week tomorrow.