Daily Market Update – June 29, 2016 (Close)
It’s generally considered a good sign when there’s buying going into the close of a session.
That’s especially the case if the session itself was a negative one.
Buying into the close of a negative session reflects the confidence that nothing is going to happen overnight in worldwide markets to make the buyer look stupid the following morning.
There was some considerable buying heading into the close of trading on Monday and those who did ended up not feeling any more stupid and more importantly not feeling any more poor the next day.
There was also buying going into the close of yesterday’s session, but that kind of buying may have been different than that seen on Monday.
Yesterday the market was higher all day and the final rush of purchases may have been less an expression of confidence, but more an expression of fear.
The old “fear of missing out.”
Few people want to get shut out from participation in a rally and often buying begets more buying, just as selling can beget more selling.
This morning, however, it appears as if yesterday’s late buying has some legs as the futures are again pointing to a triple digit gain, although it may be far more tentative than was the gain seen yesterday.
The one thing that will become more and more obvious as the initial drama of the Brexit election results are digested is that little will change overnight, as it is really in Great Britain’s hands to initiate the process.
Considering that they won’t have a new Prime Minister for another few months and David Cameron has made it clear that he’s not the one to have the negotiations with the European Union, the only thing that should really be of near term concern is whether other nations or other parts of the United Kingdom seek to make changes.
That’s still anyone’s guess, but most countries may note that things aren’t necessarily going to get better for the British economy as they leave the EU.
The real surprise is that The UK voted against its economic interests. Most other countries are not likely to do that.
I was hoping that the gains would continue today and I’d like to see some assignments this week for the 2 new positions opened, although, once again, I might not mind rolling them over, even if they are in the money.
Doing so, reminds me of what was fairly common practice about 5 years ago. Back then, though, volatility was high for most every stock in the purchase universe.
This time around, selected stocks and selected sectors are offering very attractive premiums, even as the broader volatility is still low.
Those premiums are sometimes hard to resist, especially if the downside seems to be well defined.
After today’s very strong gain and with a little bit of additional buying heading into the close, I wouldn’t mind some profit taking to end the last 2 days of the trading week. If faced with assignments, I would like to simply buy those same 2 stocks right back, as that has been the rule for 2016.
Copyright 2016 TheAcsMan