See EU Later - Brexit is for Real

Hello MarketClub members everywhere! The votes are counted and almost everyone got this one wrong, including the British betting shops. It's official - England is leaving the EU after 43 years.

I guess I was in the right camp when I posted this on June 14th.

The early reaction was the British Pound falling to its lowest levels since 1985 and stock markets around the world crashing. The one bright spot was the rush into gold which once again shot up over the $1300 level and seems poised to move to the $1400 level.

MarketClub's Mid-day Market Report

Indices: Looking at the major indices here in the U.S. this morning they are all going to be sharply lower and under pressure.

DOW (INDEX:DJI): The Trade Triangles have been neutral on this market and are presently on the sidelines. Key levels to watch today: A move below 17331 sets this index up to move down to some key Fibonacci levels. A 50% Fib retracement is 16822 and a 61.8 Fib retracement is 16500. These two areas should offer some form of natural support. The really big level to watch in June is 16545 which would turn the DOW into a bear market if breached.

S&P 500 (CME:SP500): Like the other major indices, the S&P 500 will be under pressure at the opening. The Fibonacci retracement levels we are looking for this index are as follows: 50% retracement 1968 a 61.8% retracement is 1930. A major trend reversal for the S&P 500 comes in this month at 1937.

NASDAQ (NASDAQ:COMP): A move today or next week below 4678 will put this index under pressure and set it up to test the 50% Fibonacci retracement level of 4583. The major level to watch this week is the 4581 level, if breached it would represent a major reversal in the NASDAQ to the downside.

Gold (FOREX:XAUUSDO): Earlier today around 2 AM EDT we saw the first inkling of traders moving into gold. When results came in from Sunderland, a northern industrial part of Great Britain and very close to where I was born and grew up, traders started buying gold. The feedback from Sunderland was the first clue that the mood of the country was for a change. Most of the London crowd had completely misread the mood of the country, sorta of reminds you of Washington D.C., doesn't it?

With gold well and truly over the 1300 level this morning you can now set your sights on higher target levels for this precious metal. A 50% Fibonacci retracement pushes gold back up to $1430. A 61.8% Fibonacci retracement takes this market back to $1516. I expect both upside targets hit in the coming months.

Crude Oil (NYMEX:CL.Q16.E): The oil market was not immune to the sharp drop in equity prices around the world today. Fortunately, the Trade Triangles were on the sidelines and managed to avoid today's sharp sell-off. Here are the Fibonacci levels I will be looking for in crude oil: A 50% retracement pushes crude oil back to the $45.31 level. A major Fibonacci retracement of 61.8% pushes crude even further down to $43.78 a barrel.

Stay focused and disciplined.

Every success with MarketClub,
Adam Hewison
Co-Creator, MarketClub

4 thoughts on “See EU Later - Brexit is for Real

  1. So Britain is at odds with the rest of the European continent. What else is new?

  2. i bet its mainly about the uncontrolled immigration that made the brits want to pull out. there's some sort of hidden immigration policy here in Australia too. Melbourne's standard of living has been steadily going down as population has increased and i havent met anyone who likes whats going on. Are the BANKS behind these immigration policies? in order to keep there balance sheets growing?. because they are finished if they start shrinking.

  3. Against Brexit referendum out-come, All major counters like Equities, Precious Metals and Currencies are very harshly reacted, and that is too, just on the basis of deemed possibilities, and without considering any longer view or evaluation. It seems, they lost their passions or understanding or maturity.

    There will be no immediate impact or abrupt changes, going to place,either on any specific Trade or on Economy. Whatever Positive or Negative results on concerned Countries or Related Trade or on any specific Economy or currency will be reflected in a very slower pace, so at this stage, consideration of Duration is more important because all possible changes and it's effects thereof, will be find in a much spreader time frame, so none of sector or country will be either Beneficiary or looser on "immediate" basis.

    It is quite possible that actual out come of this issue may totally different or with much lesser impact then as predicted, so Now we required to observe and try to find out many questions like "Who" "When" "How" etc. from Brexit issue, though the actual experience.

  4. England is not leaving the EU -- it was a non-binding referendum, it is not law. We'll see if the UK government will go against the popular vote or not...

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