Well, now that ZH has offered up about 739 different articles about what a big deal Brexit is, they can all go back to – – I dunno – – rehashing the Fukushima reactor for the billionth time or something. At least, until the next Great Black Hope comes along. Because, the thing is every single time one of these Things That Will Change Everything comes along, it amounts to the same thing for the past seven years:
As I’m typing this, the polls just closed in Britain, and the results obviously aren’t in yet, but it seems pretty clear that Brexit lost. In fact, on my Tastytrade show today, I pulled a possible result completely out of my ass (“52 Bremain, 48 Brexit”) and then, moments ago, I saw this:
Equities are obviously loving this, so they’ve been on a rocket ship for the past week. Indeed, it looks like there may be some lifetime highs in store on Friday on some indexes.
This is all a bit much for your friend and humble narrator, of course. I have a larger cash position in my portfolio than I’ve had in quite some time (so, ironically, even a crash tonight wouldn’t be great news for me). I have, for lack of a better term, pulled my nuts in.
The ES isn’t wasting any time, so it’s already busted up to new highs for 2016 (and again, keep in mind I am typing this not long after the regular close on Thursday, and I don’t intend to hop back onto Slope until Friday morning).
The key index chart, in my opinion, is the Dow Jones Composite. We have, over the past three months, been stuck in a range somewhat similar to the circumstance we were in from late 2014 to mid 2015 (tinted on the left, below). The “break” to this pattern was to the downside, and we stayed reliably beneath that pattern for nearly an entire year.
The present pattern could break to the upside (green arrow), which could well precede an “escape” from the big channel (and to God-knows-how-much-higher stock prices) or break to the downside (red arrow) which would give us another sporting chance at the lower portion of the channel.
I am, as you might guess, quite dispirited right now, and the only thing I’m relieved to say is that I’m so lightly positioned. All the same, every little flicker of bearish hope gets snuffed out, as it has so reliably over the past seven years, and this whole Brexit thing is just another in an unending series of heartbreakers.
Good luck out there, everyone. See you Friday.
