Saturday, June 25, 2016

BREXIT, Yellen and the morning after pill

We would like to congratulate all bears who anticipated and  correctly predicted the Brexit. 
So where do we stand right now?
We believe that it will take the markets some time to digest recent developments(consolidation).After that, some more "panic" will ensue upon realization of the implications of Brexit. SPX will move fast towards 1875 around late July where Yellen will probably treat Markets with the morning after pill-->A rate cut!
At that point SPX will quickly move above 2000.

It will be an interesting summer.
So stay tuned and enjoy!   

Friday, June 24, 2016

Is BREXIT the SHTF moment for German equities(DAX)?Not quite yet...

Has Brexit just opened the pandora's box for German stocks(DAX)?Not quite yet.
Back in December 2015 we nailed the pathway of DAX for the following months(DAX: A Huge Head and Shoulders pattern is already forming).

Currently DAX is in a well defined downtrend since March 2015.However it is still above EMA200 and in a very long intact (so far) uptrend since 2003!

We estimate that DAX will soon break below the EMA200 ,initially towards  7700.
Let the dust settle down and be patient!

Wednesday, June 22, 2016

USDJPY ahead of British Referendum

Just hours before the British referendum we will like to show the implications of Brexit or Bremain on USDJPY

Bremain: A relief move towards around 113 is almost guaranteed

Brexit: A plunge towards 90-95 is definitely in the cards

Note that usually there is a positive correlation between USDJPY and US stocks.Since early 2016 this correlation was broken.We believe that during the current move the correlation will be reestablished which means that USDJPY and SPY will move in the same direction.
Currently there is some positive RSI divergence which favors Bremain.
In or out? Pick your poison...

Monday, June 20, 2016

Biotechhnology (IBB) : Brexit or not there is still potential for a further move lower

Biotechnology shares(IBB) had a huge rally from March 2009 to July 2015 with an astonishing performance of +570%!.

However since July last year IBB is in a clear downtrend and down around -35%.

Currently we favour a further move down towards 190-200 where it will probably signal at least a medium term bottom for Biotechnology.

Will Brexit ignite the anticipated move down?Sure it can.

If Bremain predominates then a relief move towards 270 is very possible.Again this will be a very critical decision level for IBB. Above this level the road towards 300 is clear, below it ,again, 190-200 is the target.

So, all eyes on British referendum ... 

Saturday, June 18, 2016

Long term Treasuries (TLT): Cup and handle? checked. Negative yields?.........

Finally long term treasuries (TLT) did what we have highlighted since early March(Treasuries (TLT): Double top or cup with handle?) and again a month ago(Treasuries Cup and Handle revisited).
TLT has just completed a cup and handle formation.

What's the next step?A confirmation of the recent breakout towards 132 and then up.Current TLT formation points towards higher bond prices (therefore negative lower yields) and has significant bearish implications for stock markets.