Daily Market Update – June 28, 2016 (Close)
The drama was supposed to continue today, as the leader of the “Brexit” movement addressed the European Union and basically urged other countries to do the same as Great Britain, which will likely become a little less great in the coming year.
The bounce I expected to come in the early morning yesterday was pre-empted by David Cameron’s appearance in Parliament and the market really didn’t like what it had heard.
It was basically a reality check that said democracy rules in a democratic society.
Although I thought that it would be a quiet day for me, it may have been the busiest Monday in about 6 or more months, with the opportunity to open 2 new positions and rollover 2 others.
Those rollovers were a bit early and were done in an attempt to keep milking the great income producing machines that the gold related stocks have been over the past year or more.
I fully expect that by December much, if not all of the gains seen in those stocks will be lost, but I do like their ability to generate recurrent income through thick and thin.
While yesterday didn’t bring the rebound, this morning looked like it might be the real thing, despite the potential for some acrimony in the upcoming European split. The futures had been showing digit gains in the DJIA, although well off their early highs, but then mounted a comeback before the opening bell.
The rest of the world had some snap back and that may have helped. It probably didn’t hurt.
The snap back, although welcome, has still come nowhere close to erasing the declines seen in the past 2 trading sessions.
If today sticks to the script, the expectation shouldn’t be for sustainable gains, as you tend to expect people to bail out as stocks are making back some of their steep losses.
There was, however, some good signs yesterday and today’s market never really wavered.
Yesterday’s good signs were that there really wasn’t any panic and maybe more importantly, there was actually buying heading into the final hour, even as there was a reported large imbalance on the sell side.
Funny how those things seem to work out.
The expectation was for more selling going into the close and precisely the opposite happened and it definitely carried through for all of today’s session.
I doubt that I will be buying anything additional for the rest of the week, but I would definitely take advantage of any opportunity to roll positions over or to sell calls on uncovered positions.
But that isn’t any different from what I would have wanted to have done before “Brexit.”
Maybe, like so many things, the big story of the day means nothing a couple of days later, as something new grabs attention.
Unless some more shoes drop in the European Union, the story may be over until the recession so widely predicted finally happens in Great Britain, although those predictions have a funny way of not working out.