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Daily Market Update – June 27, 2016 (Close) One really has to wonder what people were thinking when they voted to leave the European Union. Reportedly, Great Britain was actually getting a pretty sweet deal. Relative to what it put into the bowl, it sounds as if Great Britain was the West Virginia of the EU, yet they still gave the European Union the Byrd. Did no one think to poll Northern Ireland and Scotland? Given England’s opposition to Scotland leaving the United Kingdom last year and the support to remain in the EU by Scottish citizens, someone should have realized that there was a problem in the making there. Beyond that, how could people so blatantly overlook their own financial interests? Xenophobia is a strong motivator, I suppose. It will be interesting to see how strong voter’s remorse may turn out to be, but the idea and talk of another vote, as more than 4 million signatures have already been collected is pretty wild and probably unprecedented. This morning’s futures were not showing any bounce to Friday’s 600 point loss. The usual script would have the loss continue until about 10 AM and then some kind of a meaningful bounce would occur. That meaningful bounce usually gives way to more pronounced selling that often leaves the market deeper in the hole. The bounce higher is often a strong lure and not so easy to withstand. That 10 AM bounce never came though, as that was about the time that outgoing British Prime Minister, and on the wrong side of public opinion on the topic at hand, spoke to Britains and the world. I liked what I heard, but investors didn’t care for it too much. We stood 5% below the all time high on the S&P 500 this morning and there was easily some more downside, since we are only a couple of percentage points below the near term high which was hit just a week or two ago. With 5 ex-dividend positions this week I may already have the income that I want for the week, but am still interested in the possibility of adding some additional positions this week, despite the risk that exists. With no positions set to expire, I would like to do something more than just listen to everyone offer their opinions and pontificate on the meaning of everything that happened last week and what more can happen down the road. If we are to believe that the usual mechanism of the market is to discount the future by about 6 months, then the prediction of a recession in Great Britain by early 2017 may be what is driving the market down further this morning. I was as rapt as I thought I would be during the day, even as the words fell onto deaf ears. What I wasn’t expecting was to make as many trades as I did and I even had another one o Hopefully, I won’t have any regret later in the week, as did many Brexit voters. |
