After the Close...Brexit Vote Sends World Markets Tumbling...Gold, Volatility and Bonds Higher...

After-hours Alert:  What was known about the Brexit vote before it happened was that to stay in the EU was status quo and certainty, to leave the EU was uncertainty and with that uncertainty increased volatility.  Brexit wins 51.89% versus to stay 48.11% and world markets dropped amid the uncertainty of what it really means.

S&P futures dropped more than 100 points, VX volatility futures jumped more than10 points, GC gold futures jumped more than $100 and ZB bonds jumped more than 7 points.

While nothing other than market reactions changes immediately, the UK now moves into the process of negotiating the terms of the exit with the EU which will evolve over the next few months leading to a process that may take up to two years to complete.

Clearly Thursday’s strong positive market action suggests that the net institutional conclusion was the vote would be to stay in the EU.  The conclusion was wrong.  Market action discounts everything and as it became clear that Brexit was winning markets discounted the surprise vote results by sending stock and futures prices lower and volatility, gold and bonds higher.

Markets generally sell off until prices get to a level that investors and traders are attracted to buy by what they consider bargain prices as they did on Monday, August 24, 2015.  Now we will wait to see at what levels buyers take advantage of lower prices.

All nine sectors moved higher on Thursday …XLF, XLE and XLB were the strongest sectors while was the weakest sector.  Oil futures rose 1.13 to close at 50.13.

Breadth strengthened as advancers led 2,502 to 511 on the NYSE and led 2,038 to 576 to on the NASDAQ.

Thursday – strengthened, advancers led, +9

Wednesday – weakened, decliners led, +3

Tuesday – weakened, advancers led on the NYSE, +5

Monday – strengthened, advancers led, +8

Friday – strengthened, advancers led on the NYSE, +4

SPY up 2.71 at 210.81 on 102.7 million shares, 21% above average volume

VIX down 3.92 at 17.25

TLT down 1.53 at 132.23…on 9.0 million shares, 33% above average volume

Technical Commentary:

IWM +1.91%, QQQ +1.43%, SPY +1.30%, DIA +1.26%,

Earning’s Announcements:

Positive Reactions: BBBY

Negative Reactions: RHT

Technical analysis based trades should be closed before earnings.

Trade what you see, not…

Stocks below support should generally be traded bearishly until a reversal pattern forms.

                                                                                                                                    

Remember:  “It’s a market of stocks, not just a stock market.”

Trade with the trend of the chart you are trading and continue to move your profit protection stops.  Continue to follow your rules.

The SPY MFC green line is pointed up at 68, bullish.

95 of 100 NDX stocks closed higher on Thursday.

76 NDX stocks are above their 30 DMA.

NDX Stocks to Watch on Friday:

Moving Above 30 DMA = 17

ADSK, AMZN, ATVI, BBBY, CHTR, EA, EXPE, FAST, FISV, FOXA, ILMN, INCY, LVNTA, MDLZ, MSFT, PCAR, VOD

Moving Below 30 DMA = 0

6-month Intermediate Term Market Trend: Neutral

3-day Short Term Market Trend: Up