Please enable javascript in your browser to view this site!

BREXIT results coincide with overnight pullback

June 24, 2016

S&P SEPT FUTURES (SPm6)
Contact: info@newtonadvisor.com

1992, 1970, 1953-5       Support
2118-20, 2132-4            Resistance

 


S&P Futures: (2-3 days)- Look to buy into post BREXIT vote S&P near 1992 which is a 38.2% decline of the entire 4 month rally from February to June, which has occurred in the last six hoursUnder near 1971-2.  Oversold severely given post vote gap down in Global assets and likely to stabilize.



TECHNICAL THOUGHTS

BBC and sky news have officially called the UK referendum in favor of BREXIT.. . the Pound Sterling, "Cable" has just had its LARGEST move on record.. down to 1.32 from 1.50.. down over 10.5%. the NIKKEI is lower by more than 1300 points or 8%. S&P futures are trading lower by 4% and DOW futures lower by more than 600 as of 12:08 am. Treasuries rallying hard, with 10-year yields down 14% to below 1.50 while 2 yr yields lower by 30%, at .54 bps and just yesterday were trading just shy of .80. a HUGE HUGE move- US Dollar index higher by a full 3% with DXY up by more than 2.55 to 96.087- a historic day of BREXILITY given this near certain BREXIT which throws most of the EU into turmoil potentially with others soon to follow- Gold higher by 50 but following the initial shock, GOLD likely to trade lower after things calm given the USD gains and commodities should also fall off- EURUSD is at 1.10. a clear break of a key trend which if holds would be very bearish for the Euro going forward- For equities given the recent strong breadth and acceleration in momentum, my thoughts are that Friday's selloff proves minimal and a buying opportunity given the amount of fear, For now though, globally most assets falling hard overnight

 

 

S&P's pullback has given back far more than expected, but then again, BREXIT possibilities were thrown by the wayside as markets rallied in a manner that would have made "BREMAIN" seem like a landslide.-  Key areas for S&P lie near 1992, or the 38.2% Fibonacci area of support of the entire four month rally from February, or below that near 1971

 

 

"Cable' Pound Sterling's drop erased the most on record as of early Friday, as the Pound was down more than 10% and gave back all the gains of the last few days, undercutting 09 lows in the process and getting down to the lowest since the mid-80's.  Intra-day charts are very oversold, but weekly/monthly suggest that additional losses could occur.

 

 

Pre-BREXIT decline, one bright spot concerns Thursday's move in the Semis.  To comment further on yesterday's Semiconductor thoughts, Thursday's SOX breakout is indeed quite positive for the sector and should allow for further gains in the weeks ahead to test and exceed 2015 highs.  For now, technically this remains in very good shape, but the BREXIT aftermath might lead to this pulling back to test early June lows.  For now, SOX remains attractive to buy dips on pullbacks Friday and next Monday.

 

 

Disclaimer:

This report expresses the opinions and views of the author as of the date indicated and are based on the author's interpretation of the concepts therein, and may be subject to change without notice.   Newton Advisors, LLC has no duty or obligation to update the information contained herein.   Further, Newton Advisors, LLC makes no representation, and it should not be assumed, that past investment performance is an indication of future results. Moreover, wherever there is the potential for profit there is also the possibility of loss.  The information provided in this report is based on technical analysis. Technical analysis is generally based on the study of price movement, volume, sentiment, and trading flows in an attempt to identify and project price trends. Technical analysis does not consider the fundamentals of the underlying corporate issuer. The investments discussed or recommended in this report may not be suitable for all investors.  This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as representation or solicitation for the purchase or sale of any security or related financial instruments in any jurisdiction.  Certain information contained herein concerning economic trends, Fundamentals, and/or Technical analysis, and performance is based on or derived from information provided by independent third-party sources.  

Readers should conduct their own review and exercise judgment prior to investing. Investments are not guaranteed, involve risk and may result in a loss of principal. Past performance does not guarantee future results. Investments are not suitable for all types of investors.  Newton Advisors, LLC believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based.  From time to time the publisher, his associates or members of his family may have a position in the securities mentioned in this report:  This report, including the information contained herein, has been prepared exclusively for the use of Newton Advisors clients, and may not be copied, reproduced, redistributed, republished, or posted in whole or in part, in any form without the prior written consent of Newton Advisors, LLC.