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BREXIT Fears June 11, 2016

Posted by Tom in Thoughts.
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June 10, 2016 – This past week was going along fairly well until Friday when a new poll taken in the UK showed that more people favored leaving the EU than staying.  In any case, it does appear that the vote will be a close one.  Rumors are flying that Holland maybe thinking about a similar vote.  IF the UK were to exit the EU it is very uncertain what affects it would have on any economy.  Likely though bonds in the US would go up as well as the US $ and Gold.  Oher than that, it’s a coin flip.

This does show how venerable the market is though.  Folks are nervous even with the grind higher.  Looking at the chart below we note that the prices are now at or very close to the recent highs back in November / December.  The narrow bars last week are an indication of buying / selling in balance with a bend toward a change, since there is minimal commitment on either side.

NASDAQ

Right now (close of Friday, 6-10) we are close to a short term lower channel trend line (not shown, sorry); that’s at 4850.  The next area that concerns me is around 4765 (a mathematical stop price).  The support levels shown on the chart are primary as well, since they go back to previous support levels.

My Trend math model has turned neutral (cash) from Bullish, so IF weakness continues into Monday, I’ll exit my Long index positions.  Sentiment remains Bullish, so I would hold off any Short Index position until that verifies a change.  I’m certainly not raising the red flag, but for the past 2 weeks I’ve been cautious, and this maybe the correction that fulfills that feeling.

The pie chart below shows what sectors the stocks are in that I’m tracking as Bullish.  Obviously, I’m not buying these just yet, but could if we get a correction, then a sign of strength.  My own opinion is that any correction would be minor (within the current move) and may be a buying opportunity; but that has to prove out.

Top Sectors

(as always, click on any graphic to enlarge it)

That’s it for this week.  Take Care & Good Trading.      ………….  Tom  ………….

Price chart by MetaStock; pie chart by http://www.HighGrowthStock.com. Used with permission.

 

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