Jerry Samet
06-20-2016, 05:53 PM
It looks like there was a Brexit rally today. The market gapped higher at the open today following a strong rally in Europe. A poll came out yesterday showing the remain vote in England is winning and fears that they would leave the EU lessened. This may take some of the uncertainty away from Thursday’s vote, unless the vote is to leave. The futures were much higher before the open and the major averages gapped up to very solid gains. The day’s highs were set in the first forty minutes and then the major averages worked their way lower the rest of the session, although they still closed with solid gains. The COMPQ was higher by .77% and the SPX rallied .58%. Both closed at or near their intraday trading lows, a sign that some market participants were selling into the rally. Volume was lower across the board, as you would expect after an expiration day, but it was still below average on both exchanges. Leading stocks were higher as well, but followed the same pattern as the overall market. The leaders index was higher by 1.19%, but the index closed near it’s intraday lows. It tried to get above it’s 9dma and 17dma, but failed and closed below both these important short term moving averages. The SPX managed to close above it’s 50dma while the COMPQ lost this support level. We knew there would be a reaction to the vote on Friday, but this moved it up. If the vote is to stay it should have little effect on the market. If the vote is to leave it likely will cause a sell off. This was a relief rally at best, but the fact that the market was weak at the end mitigates a lot of the positive effect. Jerry