20 June 2016 – Brexit emotions roil market

The indices were up by a huge pre-market due to fears of Brexit receding. Latest polls in the UK indicate the Remain sentiment is leading the Leave sentiment. The referendum is due to take place this Thursday, 23 June. Oil prices gained for the day. Bonds remained strong. Gold lost ground and the dollar index continued its downtrend.

Dow Transportation had a huge rally pre-market which continued in the first hour after market open. It reached the high of the day and sold off slowly for the rest of the day and closed with an inverted hammer candle below its 21 EMA, 50 SMA and 200 SMA. Momentum remains downward. Daily volumetric buying pressure is at 53.3%.

Dow Industrial shot up on market open and reached its high of the day in the first half hour of trading. It sold off slowly for the rest of the day and closed with an inverted hammer candle on its 50 SMA. Momentum remains downward. Short term volumetric buying pressure is at 57.4%. The index is in a monthly Squeeze.

Russell 2000 shot up on market open and reached its high of the day in the first two hours of trading. It had a slow sell-off and closed with an bullish candle above its 8 EMA and 21 EMA. Momentum remains upward. Volumetric buying pressure is at 25.1%.

Nasdaq 100 gapped up on market open and continued its rally upward in the first hour and half of the day. It then sold of slowly and closed below its 50 SMA and 200 SMA with a bearish candle. Momentum remains downward. Volumetric buying pressure is at 58%. The index is in a monthly Squeeze.

S&P 500 gapped up on market open and traded slightly upward in the first hour of trading. It had a slow sell-off for the rest of the day and closed with an inverted hammer candle. Momentum remains downward. Volumetric buying pressure is at 68.2%. The index is in a monthly Squeeze.

Metals and Commodities
Oil (/CL) futures traded up to $49.73 per barrel. Gold (/GC) futures spiked up to $1291.5 per ounce. Silver (/SI) futures is at 17.525 per ounce.

Agriculture (DBA) ETF closed at 22.51. Commodities (DBC) ETF closed at 15.41.

Bonds
High Yield bond ETF (HYG) spiked up to 83.62. Bonds ETF (TLT) dropped down to 136.16.

Currencies
The dollar index is at 93.555. EUR/USD is trading at 1.13369. USD/JPY is at 103.950 continuing its downtrend.

Relative Strength – Sectors
On a monthly lookback, the ETFs outperforming the S&P 500 are XLU, XLE, XLP, XLB and XLI respectively.

On a 3-month lookback, the relative strength order are XLE, XLB, XLU, XLV, XLF, XLP, XLI and XLK are outperforming the S&P 500.

Market Internals
Vix closed at 18.37. Vix futures is at 18.45. Skew is at 137.81. Market sentiment is bullish. Market breadth is flattening. Volumetric accumulation/distribution is sloping upward.

The Week Ahead
The market is giving mixed signals. On one hand, it gapped up over the weekend which is a rather bullish signal but sold off within the day. The prognosis is that it will remain volatile till for the rest of the week as Brexit referendum is on this coming Thursday.

To YOUR wealth!