Looming Brexit Vote Shaking Markets
06/15/16 Weekly Re-Lay Alert: Brexit Brouhaha
“As we enter the final week leading into the UK’s vote on Brexit, the markets are reinforcing the uncertainty being felt in Britain, the EU, and around the globe. Gold is surging (as is Bitcoin) – corroborating the cycles peaking during the middle half of June – as global Indices have sold off and turned short-term trends down.
Regardless of the Brexit vote outcome, cycles continue to project yet another crisis for the British Pound – following the 8-Year Cycle that pinpointed UK currency debacles in 1968, 1976, 1984, 1992, 2000 & 2008. [See June ’16 INSIIDE Track]…
In each case, the final low was in the ensuing year (1985, 1993, 2001 & 2009) – following dramatic declines – creating a delayed 8-Year Cycle that projects a final British Pound low in 2017.
And then there’s the FTSE that set descending highs in April 2015 & April 2016 and has already created an outside-month to the downside. Any additional uncertainty could accelerate those declines. Meanwhile…
Stock Indices (US) are steadily validating the potential for an intermediate peak in the first half of June… and remain vulnerable to a sharp drop into late-June–early-July (~5 months from the late-Jan./early-Feb. lows – that were ~5 months from the preceding late-Aug./early-Sept. ’15 lows).
The DJ Transports are again leading the way and looking like they could enter an accelerated decline in the coming week(s). The same is true of the DJIA as these Indices move through the most vulnerable period of their latest ~5-month cycle… the last couple weeks.
That is when the sharpest drops (often 80% of an overall decline) have been seen. Just as in Jan. ’16 & Aug. ’15, the Indices are positioned to where they could see a sharp 2–3 week sell-off to culminate the latest cycle.
There remain several Indices that waited until early-Feb. to set their previous lows, so this decline still has the potential to stretch into July (~5 months later) before bottoming.
Corroborating this, and allowing 1 or 2 Indices to spike higher in early-June, the Russell 2000 has perpetuated a very consistent 6-month/~180-degree cycle that includes a high (monthly close) in June ’14, & ensuing highs in Dec. ’14, June & Dec. ’15.
It also completed a 50% rebound in time (rebounding for 4 months after an 8-month decline) as all the Indices fulfilled the weekly LHRindicator.
Almost all of the Indices are primed for an accelerated decline – reinforced by key signals on today’s close…
1–3 & 3–6 month traders & investors could have re-entered the short side of Stock Indices at 17,912–18,016/DJIA, 2077.5–2105.25/ES & 4378–4545/NQ and should [reserved for subscribers only; watch events of June 20–24th for critical confirmation]….
[See June 15, 2016 Weekly Re-Lay Alert for additional analysis on other markets projecting a Brexit vote and a corresponding British Pound Crisis in 2016/2017. Stock Indices reinforcing expectations for a sharp sell-off in late-June/early-July – a precursor to what is expected later in 2016. See Stock-flation (and related) Reports for additional details.]