Peak Brexit week – No Bremain for old men

Posted: June 20, 2016 in Uncategorized

Well, finally we are here…the 24 June finally we will know about Brexit.

The pure technical analysis for the UK FTSE give this set of data (Short Term)

Brexit

UK -16%

Gold target USD 1,350/1,500

UK Pound could dive 15-20%

Bremain

UK +10%

Gold target USD 1,250/1,200

UK Pound +5-7%

(practically returning where it should be)

The reality is that Bremain will likely win (latest polls/ betting centers).

In effect if Brexit wins the biggest issue for all is the uncertainty…more than Brexit itself.

There will be contracts and agreements that would take years to review and resettle and lot of confusion…and the market hates confusion.

Also Bremain is not all good…aside the “momentary joy” the UK would be forever linked to the European fortunes which are clearly in decline. Moreover just the existence of the referendum has bolstered the anti Europe parties (Italy just had a regional vote with, apparently as ballots are still being counted, a swing to the anti European party MI 5). And with the French and German elections in 2017 – it could just be a delay of the inevitable.

And specially if in the negotiations Britain gets a good deal…why should only Britain gets a special treatment?

In effect I side with the Swedish  Ms Wallstrom (Swedish MP and ex European Commissioner) and Ms Linde  (Swedish Minister for Europe) that said that UK PM Cameron has been a self serving opportunist that risk a major crisis for his own political issues.

So, apart momentary relief,  even if Brexit lose – the market will remain unsettled and my positive forecast should be looked for the very short term.

A bit like the really black movie of the Cohen brothers “No Country for old men”…no good will come out of this. Either way.

 

 

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