Stock Market Early Morning Insights – June 23, 2016

 Yesterday turned out to be a choppy day, as I suspected it would be.

Stock index futures have to move for traders to make money, or lose money, so the big players seem to move the futures around, and the emotions of the Bulls and Bears vacillate between optimism and pessimism. Yesterday, during the morning hours, the Bulls were in control of the futures in the broader markets, but by the end of the day, profits were taken, and it turned into another distribution day. Early in the day the advancers were leading the decliners by a margin of 2.3 to 1, but by the end of the day, decliners led by a margin of 1.51 to 1.

A close look at the last several days shows that the indexes are in a holding period supposedly waiting for the outcome of the Brexit vote that is going on right now. The European markets suggest that the Brits will stay within the European Union, and this is reflected in the US stock index futures, which although positive, are well off of their early-morning highs. Where they stand now means nothing as we have seen early-morning strength the past few days dissipate as the day goes along. If you are a E-mini trader, you love both the movement and the action, but on emotional days like today, it is easy to get caught on the wrong side of a trade.

Yesterday was another low-volume day for the stock indexes as traders bide their time waiting for the outcome of the Brexit vote. After all of the anticipation and expectations, it may turn out to be a nonevent. We just don’t know. The experts are predicting a massive dislocation in the forex, bond, and stock markets if the “leaves” win today. The polls are suggesting a very close vote, but the markets in Europe and the US futures are betting on the “stays” winning. The US stock indexes are trading near all-time highs, and the expectation seems to be that the indexes will eventually breakout into new high territory, but every time the new highs have been challenged, they fall back.

As of yesterday’s close, this is how the major market indexes have performed since the beginning of the year. Utilities and REITs, dividend yielding groups have been the best performers, but some indexes have done moderately well. The major indexes that everybody watches, have for the most part done little. The NASDAQ composite and the NASDAQ 100 are still negative for the year, and the S&P 500 is only a 2%. The AMEX numbers are not relevant in this comparison because the index contains many ETF’s, some leveraged, and on both the bull and bear sides. There are also many precious metals and exploration and production stocks contained in the index. If you ever been frustrated by trading this year, so have most hedge funds and money managers. HGSI has been showing us the strength in precious metals, utilities, exploration and production stocks, and REITs for months. If you take the time to look back through this year’s history in this report, you will see what I mean.

Stock index futures are currently up close to 1%. It is tempting to get in there to make a bet, but that’s all it is at this point if you are an extremely short term trader.

STOCK MARKET EARLY MORNING INSIGHTS

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