Things May Be Afoot

“The only function of economic forecasting is to make astrology look respectable.” John Kenneth Galbraith
The markets were in selloff mode last week and looked lower until Thursday when it reversed higher. So why did that happen?
The SPX ws down 25 handles and the Dow was down around 190 points until about 10.15 until things bottomed on Thursday.

Many believe  it was because a lawmaker from the U.K.’s main opposition Labour Party died after a brutal attack on the street in northern England, in which a witness said an assailant used a knife and gun.

Jo Cox was against the Brexit and some “pro Brexit” maniac took her life.  Horrible.

It’s sad that the market would rally on this, but the takeaway was that the Brexit campaign that was scheduled for Thursday night would be delayed, and it was.  This helped rally the British pound and other things. Sick world.

When this news was disseminated, markets of all sorts started to rally. So was the rally just a knee jerk that set off some short covering? Will we resume to the downside next week as we get closer to the Brexit vote?

Since the assassination, markets have firmed up because the polls, which were leaning Brexit, are now back to slightly leaning “to stay”.  The vote is June 23.

Would a move to the May lows be the end of the world? Au contrair, it would be a healthy event in my opinion. We need to flush out some weak hands right about now. I’m tired of this market’s inability to make new highs. Flush it out and lets get back to business.

Anyway, a lot of the technicals say we can flush out, but certainly so much depends on the results of the Brexit vote. A vote to leave will undoubtedly throw European markets, and ours, into a temporary tailspin.

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