28 June 2016 – A rally post-Brexit

The indices rallied from the panic selling the last couple of days. Vix falls and advancers outpaced decliners by a 6-1 ratio. Bonds did not budge as it is a safe haven as investors are looking for more market stability. The late day push comes ahead of a hope on the softening of the Brexit outcome.

Dow Transportation gapped up on market open and then range traded for the rest of the day. It had a last hour rally and closed with a bullish marubozu candle within a bullish harami candle pattern. Momentum remains downward. Daily volumetric buying pressure is at 28.2%.

Dow Industrial gapped up on market open and range traded in its upper range. It had a last hour rally to close with a bullish marubozu candle in a trend reversal candle pattern. Momentum remains downward. Short term volumetric buying pressure is at 19.6%. The index is in a daily and monthly Squeeze.

Russell 2000 shot upward on market open and then range traded for the rest of the day. It closed with a bullish marubozu candle. Momentum remains downward. Volumetric buying pressure is at 20.9%.

Nasdaq 100 had a big gap up on market open and range traded for most part of the day. It had a last hour rally and closed with a bullish marubozu candle. Momentum remains downward. Volumetric buying pressure is at 20.4%. The index is in a monthly Squeeze.

S&P 500 gapped and shot upward on market open and range traded for the most part of the day. It rallied in the last hour and closed with a bullish marubozu candle in a trend reversal candle pattern. Volumetric buying pressure is at 25.8%. The index is in a monthly Squeeze.

Metals and Commodities
Oil (/CL) futures traded upward to $48.17 per barrel. Gold (/GC) futures is at $1317.7 per ounce. Silver (/SI) futures is at 17.865 per ounce.

Agriculture (DBA) ETF closed down at 22.00. Commodities (DBC) ETF gapped up and closed at 15.22.

Bonds
High Yield bond ETF (HYG) is up at 83.08. Bonds ETF (TLT) is up at 139.46.

Currencies
The dollar index is at 96.105 at its 200 SMA. EUR/USD is trading at 1.10739. USD/JPY is at 102.443.

Relative Strength – Sectors
On a monthly lookback, the ETFs outperforming the S&P 500 are XLU, XLE, XLF, XLY, XLK,XLV and XLI respectively.

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

Market Internals
Vix closed at 18.75. Vix futures is at 18.95. Skew is extremely elevated at 153.66. Market sentiment is back to bullish. Market breadth is flattening. Volumetric accumulation/distribution is sloping downward.

The Week Ahead
The market internal is giving mix signals as it stabilises. The prognosis is that the market is still vulnerable to big sell-offs.

To YOUR wealth!