The Brexit vote is official, with Great Britain voting to pull out of the EU.
To say that this completely caught the markets off guard is an overwhelming understatement.
The affect has been immediate with global markets around the world selling off.
Pre open, the S & P 500 is off about 80 points and the DOW is down just over 500 points.
The VIX is up to over 26, which is what you would expect.
And the TLT is up over 3% and gold, as well, is making a strong push up.
My advice is simple.
Do not panic.? Think of this sell off as opportunity.
My immediate concern is that the robots or high frequency traders kick in and the market continues to follow through on the downside.? This could be an event similar to the flash crash that happened back in 2010.
If that happens, you need to be nimble, because most likely we will be in fast market conditions.
Having said, the bounce back rally was good for a significant gain at that time and I suspect something similar could happen today.
If you do day trade and are not comfortable trading in this type of environment, stay out and wait for the markets to settle down.? They will.? They always do.
This vote most likely takes any rate hike off the table this year, which means that high yielding stocks should continue to be attractive.
This event should take a while to sought out.? But I do not believe it is the end of the world.
The levels should help us determine if the major trend has changed and I will highlight them below.
Here are the key levels for the markets.
VIX:
Major level - 31.25
Minor level - 28.91
Major level - 28.13
Minor level - 27.35
Minor level - 25.78
Major level - 25.00 *
Minor level - 24.21
Minor level - 22.66 *
Major level - 21.88 *
Minor level - 21.09 *
Minor level - 19.53
Major level - 18.75
As the VIX heads higher, expect the markets to continue lower.
The VIX appears set to open above 25.? 24.21 should be support.
The key upside level will be 28.13.? If the VIX gets above that level, it could run up to 37.
37 would be a long term target.
S & P 500 Cash Index:?
Minor level - 2,140.62
Major level - 2,125.00
Minor level - 2,109.38 *
Minor level - 2,078.12 *
Major level - 2,062.50 *
Minor level - 2,046.88
Minor level - 2,015.62
Major level - 2,000.00
2,000 should be major support for the S & P 500. Based on the pre open sell off, the open should be around 2,043.?
This will be just under the minor 2,046.88 level.
A drop to 2,000 would still maintain the bull market.
Other levels to watch today are 2,031.30 and 2,015.60.
Nasd 100 (QQQ):?
Major level - 112.50
Minor level - 111.71
Minor level - 110.16
Major level - 109.38
Minor level - 108.60
Minor level - 107.03
Major level - 106.25
Minor level - 105.46
Minor level - 103.91
Major level - 103.13
Major level - 100.00
Major support level is 100.? 103.13 should also offer support.
The QQQ is trading around 105 pre open.? Look for 105.46 to be resistance.
Watch the minor 103.91 level.
TLT:?
Major level - 137.50
Minor level - 136.72
Minor level - 135.16 *
Major level - 134.38
Minor level - 133.60 *
Minor level - 132.03
Major level - 131.25
Minor level - 130.46
The TLT is set to open around 136.? Watch the major 137.50 level.? If it breaks through that level, expect it to move higher.
Resistance should be 140.63.
GLD:
Major level - 128.13
Minor level - 127.35
Minor level - 125.78
Major level - 125.00
Minor level - 124.22
Minor level - 122.66
Major level - 121.88 *
Minor level - 121.09 *
Minor level - 119.53
Major level - 118.75
The GLD is set to open up around 5.54% at 126.76.
131.25 is a level I would not expect the GLD to break through on this drive.
Watch the 127.35 level.
XLE:
Major level - 71.88
Minor level - 71.09
Minor level - 69.53
Major level - 68.75
Minor level - 67.96
Minor level - 66.41 *
Major level - 65.63 *
Major level - 62.50
The XLE should open around 66.50 this morning. This is just above the 66.41 level,? If it breaks under that level, expect a move down to 65.63.
The XLE could drop to 62.50 and the uptrend would still be intact.
Apple:
Major levels for Apple are 106.25, 100, 93.75, and 87.50.
Apple is set to open at around 93.35.? 93.75 is a major level for Apple.? Two closes under that level and it could drop to 75.
95.31 should be resistance.
Watch list:
Bullish Stocks: MMM, CLX, NEE, WYNN, DLR, HSY, DTE, DLTR, XOM, GOV, LL, LOCK, EGHT
?
Bearish Stocks:? CMG, BIIB, TSLA, AMG, AMGN, GD, UHS, PANW, ALXN, EXPE, DEO, CELG, GILD, TSO, LLY, R
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Be sure to check earnings release dates.
