Yesterday I posted "My guess is that the Brexit side will win and that will help the market get to 2025. However, once the dust is settled, the potential of a recession in the UK and the rest of Europe will force the Feds to not raise rates, which in turn is bullish.". Brexit won and the market reacted accordingly by plunging as much as 100+ points in pre-market before bouncing somewhat in the cash market. It's hard to tell if the pre-market low equivalent in cash will be revisited (2000) but there is still a favorable chance the 2020-2025 level will be tested. If that support level fails to hold, we might see selling until 1965. Once people stop panicking (not us obviously since we've been anticipating this), the market will have corrected enough to launch a new rally to new all time highs.
The exit of the UK from the EU should not have been that much of a shock in my opinion. Countries in Europe have clear differences that have made them nation-states for hundreds of years. The idea of taking sovereignty from these countries to form a Federal system has always been an ambitious experiment. Now the EU is like a table with three legs and some of the wealthier countries might follow the UK soon, especially if they see the UK survive the ordeal. I am sure there will be economic consequences but in the end the UK will be just like Switzerland. The Swiss have done well despite never joining the EU and seem content with their country as is.
Have a great weekend!
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Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bullish