A Glorious Day
What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with 51.9% of voters counted electing to leave the European Union.
Waving good-bye to Brussels!
It goes without saying that this historic vote will have long term implications all across the rest of Europe, as resistance to a increasingly authoritarian, wasteful, and bureaucratic European Union has steadily been growing across the Euro zone over the past few years. The dominos are just now starting to fall. Minutes ago David Cameron announced that he will step down as Prime Minister , stating that the country requires fresh leadership
South of the border we already are hearing calls for a Frexit referendum from Marine Le Pen, leader of the conservative EU-skeptic Front National party. In light of this unexpected victory other nationalist leaders across Europe will certainly now be considering their options. Without doubt it is going to be a very hot summer in Brussels.
Cameron resigned just now… said he wanted to have a few quiet days with his pig to mull things over.
Cartoon by Steve Bell
Market Turmoil
Financial markets across the board are in turmoil, as should be expected, with panic and news of impending doom and gloom spreading rapidly. The Dow is already down 600 points, the DAX has dropped by over 10% this morning, and the FTSE 100 is down 8.7% as of this writing [1][2].
The situation is highly fluid but let’s review some the carnage thus far. First up the British Pound, which took a pretty nasty hit overnight and is currently trading near 2009 levels. Thus far the lower 100-month Bollinger band and the 1.38 mark have provided support. A further slide toward 1.3 is a definite possibility.
British pound, weekly and monthly – click to enlarge.
EUR/USD down as well but not as much as I had hoped. What will it take for me to see this thing trading on par with the Dollar? Germany leaving the EU?
EUR-USD, daily and weekly – click to enlarge.
Equities – the S&P futures have already bounced back and note that the initial drop didn’t even manage to take out the 100-week SMA. I think we are in pretty good shape here right now, as long as the 2k mark can be held.
S&P 500 futures (ES) daily and weekly – the 100 week SMA has held so far – click to enlarge.
The Dow also already on the mend and attempting to recover the 100-day SMA. Given the magnitude of the event that was a pretty minor response IMNSHO. Of course once the session opens we may see further weakness as positions continue to be unwound.
Dow futures (YM), hourly and daily.
Gold was already fairly bullish ahead of the vote and is enjoying the attention. Not a huge response either here, but let’s see what the rest of the session brings.
Gold, daily and weekly – click to enlarge.
Incidentally the queen has been up early counting gold bars, as she’s not taking any chances
Queen Elisabeth quickly checks if everything’s still there. Might need it now (of course that socialist statist moron Gordon Brown sold most of Britain’s gold right at a 20 year low in 1999!)
Photo credit: DAPD, Reuters
And my favorite chart of the day, and once again one that most people seem to be ignoring right now – bonds! After some profit taking the initial spike to 174 has been reduced to 171, but we may see more here as as the rebound is less pronounced than on equities or precious metals. I have been pointing to bonds for a long time now and clearly for a reason.
Treasury bonds (ZB), daily and weekly – click to enlarge.
Conclusion
As usual I caution you from getting caught up in the wave of fear that is now washing over the financial markets. You know the script: Ignore the noise and focus on the charts. Once the dust settles, we’ll be sure to jump on any disoriented victims ripe for the slaughter.
Addendum: Rule Britannia
Congratulations Britain! History will remember June 23rd, 2016 as the day when the Britons stood strong against the cancer of unmitigated globalist expansion and creeping authoritarian dominion by a cabal of unelected bureaucrats in Brussels .
You are but the first of many EU dominoes to fall in the coming months and years. But it is the very first that always counts the most. I leave you with this for the sing along:
Rule, Britannia! Britannia, rule the waves!
Britons never, never, never shall be slaves.
When Britain first, at heaven’s command,
Arose from out the azure main,
This was the charter of the land,
And Guardian Angels sang this strain:
The nations not so blessed as thee
Must, in their turn, to tyrants fall,
While thou shalt flourish great and free:
The dread and envy of them all.
Still more majestic shalt thou rise,
More dreadful from each foreign stroke,
As the loud blast that tears the skies
Serves but to root thy native oak.
Thee haughty tyrants ne’er shall tame;
All their attempts to bend thee down
Will but arouse thy generous flame,
But work their woe and thy renown.
To thee belongs the rural reign;
Thy cities shall with commerce shine;
All thine shall be the subject main,
And every shore it circles, thine.
The Muses, still with freedom found,
Shall to thy happy coasts repair.
Blessed isle! with matchless beauty crowned,
And manly hearts to guard the fair.
Rule, Britannia! Britannia, rule the waves!
Britons never, never, never shall be slaves.
Charts by Ninja Trader/ Evil Speculator
Chart and image captions by PT
This article was penned by the Mole, and appeared originally at the Evil Speculator.
