Market rally, Brexit tantrum over? – Update 30 June

Posted: June 29, 2016 in Uncategorized

Well, technically speaking not yet.

As I forecasted the algo trade machine they stop after 3 days as  technically we are in oversold. The ramifications of Brexit will be felt for a while.

Some key support have been broken.

There are also some positives. USD declined and some good data out of the US. But what lifted the shares was talk (as usual) of potential market intervention. Which was not confirmed and the Reserve Banks will never intervene that early. Only if the SP500 will go to 1920/1820  they will intervene.

Still there are some bargains out there specially looking at currencies. But is a play not for the small investor.

30 June update

The market is still in UP condition with a high stress level. We now reached the first serious resistance (SP500 2,070) and we need to watch very careful. The oversold conditions have been neutralized so a new game starts now (as in previous post these days have been mostly driven by algo-machines).  There has been a serious breach both on the SP500 and the VIX. The markets and inflows of liquidity are still in uptrend, but it is mainly caused by a larger than usual pension fund re balance. Be watchful.

A note: this positive market with repeated breaches  is historically consistent with the early stages of a Bear Market. Considering the Fed intervention and the US Presidential elections the market could still go up until November – but at that point, unless the economy really turns around things could turn nasty.

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