Thursday, June 23, 2016

Adding to Shorts

The no Brexit rally is well underway, even before the results come in.  The betting market has spoken, and most of the relief rally is already over with.  The market always looks forward.  It is already jumping the gun on a relief rally and barring a miracle Brexit, there will probably be a little bit more upside into tomorrow.  It is where I will be adding to shorts.  I overplayed this one, I should have just sat back and waited to short it all around ES 2100 which was what I was expecting after the no Brexit vote passed.

The relief should be short term after this Brexit vote, because there is nothing to look forward to.  In fact, this Brexit issue has taken attention away from the weakening fundamentals.  It will be back to reality by next week, which is where the real volatility should start picking up.  This pre Brexit anxiety was just a sneak preview to upcoming selloffs.  Just like the Grexit last July and the FOMC rate hike in December was the prelude to volatility the following month.  This should be the setup that hooks in the bulls and gets them trapped on the next selloff.  I am expecting the next drop to not be so benign.  But like the past 18 months have shown us, it takes a lot of choppy trade near the top before you get the full blown move lower.


Anonymous said...

( TrendRambo on Twitter): There is still a high probability of Brexit. Few days ago I voted on online poll of The Telegraph. 526 thousand votes and 72% favored Brexit. Ladbrokes : 65% to leave. Social liberal leftist globalist media reporting heavily skewed poll numbers. Monday gap up faded. Should see a similar pattern today then will see Friday morning the results.

Market Owl said...

Hedge funds are taking exit polls and they are showing Remain ahead of Leave. That is why Europe is up so strongly today.

MM111 said...

Wow 2127 already.