The Morning Call
6/27/16
The
Market
Technical
Monday Morning Chartology
In
the wake of the Brexit vote, the S&P suffered some severe whackage. However, it closed right on the lower
boundary of its short term trading range and above its 100 day moving
average. So technically speaking, little
damage has been done. True, it we get a
follow through to this flush, then the technical picture will change. But as of this moment, nothing has really
happened except that the S&P is at the lower boundary of it short term
trading range.
The
long Treasury had a very good Friday. As
you can see, it popped back above a key Fibonacci level and remained above its
100 day moving average and within very short term, short term, intermediate
term and long term uptrends. Notice that
the upper boundary of its short term uptrend and another key Fibonacci level
hover right above the TLT’s current price and that the last time TLT tested
that level it was rejected---meaning that it needs to successfully challenge
this level before we can expect more upside.
GLD
(126) is the most interesting chart. On
Friday it finished above the upper boundaries of both its short term and
intermediate term trading ranges. If it
remains there through the close on Tuesday, the short term will reset to up; if
it remains there through the close on Wednesday, the intermediate term will
reset to up. It is then easy sailing to
the 140 level---the upper boundary of its long term downtrend.
Even
though the VIX was up 49% on Friday, I wanted to provide a little long term
perspective. If stocks are about to
adjust to more realistic valuations, the VIX has plenty of upside from
here. However, as I noted above, the
Averages haven’t even reset their short term trading ranges; so it is too soon
to be looking for more upside in the VIX.
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