Mild gains across US equities come on the heels of European strength. The DAX and UK are leading. At the same time, the S&P 500 has trudged higher by only about 12 points in the last 4 days (but regained about 50% of what was lost since 6/8-6/16)
In general, most Global equities are trading near 5 month highs.
The global marketplace is still very quiet ahead of tomorrow’s BREXIT vote, which currently shows about a 1/4 chance of UK leaving. The Pound Sterling is higher by around 3.3% over last few days and nearing key resistance. I’m also seeing minor gains in Copper, Zinc and industrial metals, while Gold has broken down as of yesterday (gold fell under 1277). I’m anticipating some clarity and relief of uncertainty in the days ahead. Crude oil is trading higher and currently above 50 (now rolling to August as front month contract).
Treasuries are relatively unchanged after yields moved to 2 week highs in the US. German Bund yields are still inching higher at .062 bps.
Overall, market breadth is still quite strong in equities and momentum has improved in recent days. This does favor that once the BREXIT decision is resolved, equities will likely move back to highs. 2110 remains an important level to watch. I will be looking to buy dips and pullbacks into (and out of) BREXIT, given strong market breadth. Note that pivot resistance today lies at 2086 for ES, then 2092. Price support on the downside resides at 2074, 2068.
To the charts.
We’re seeing mild gains in US equities, but overall not much over the last few days – up only about 12 points on the S&P 500. The pattern at this time remains constructive and a move over 2086 would allow for more gains.
BREXIT betting odds are down to about 25% this morning. This is a big about face from late May when odds got up to nearly 45%.
The Pound Sterling (GBPUSD) has risen near key resistance ahead of BREXIT vote (1.48 per USD). This has been a quick move, but resistance will be tough to overcome for GBPUSD. Volatility still should remain high in the next few days.
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The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
