The Brexit is Real

[Tomanyiron]

I stayed out in both Fantasy and RL TSP accounts. I figured a buy opportunity would occur if it happened. It's just more waiting than anything for the market to determine a bottom.

We had quite a few members who opted to buy the dip Friday. They saw it as opportunity to buy at a discount. But stocks haven’t dipped so much that they’re suddenly cheap. A lower price is a lower price, but not necessarily a good deal. We are only 3.86% down from the Jun 8th high of 2,119 (S&P500). And the summer is just getting started. The last three bottoms went below 1,870, which is about 10-11% below where we are now. That’s the chart way of looking at this.

You can’t deny that there are many questions weighing on investors minds now. A few of which are:

What will be the terms under which Britain leaves the union? What kind of new trade deals will the U.K. reach with other nations once it is on its own?

Will Brexit spur other EU members to secede?

Britain won’t exit the E U for about two years. There is a lot of uncertainty about what happens next and its effect on the global economy. The stock market doesn’t like uncertainty.

[evilanne]

First we have to wait and see if they will actually follow through or will they find a way to keep the status quo? Although it looks like they will proceed with exit there is no guarantee that it will actually come to pass. They have petition for another referendum, parliament could override the vote or not take action etc. see http://www.politico.eu/article/eu-refer ... after-all/

If they follow through, I think it will be the beginning of the end for the EU. I like what TSPSmart said:

The real fear from the vote is that other countries within the EURO currency will want to exit next. Something about taxation and regulation without representation - the people do not get a vote in the EU system. Americans would have left along time ago...wait we did.

Northern Ireland and Scotland did not like being under England's umbrella, so they liked the EU better than most.

It does seem like it should trigger a change in trend from risk-on to risk-off, but the central banks will fight it.

Financials seem to be hardest hit. The fear/emotional reaction seems uncanny since it will take several years for anyone to actually Exit. Hope it doesn't send the economies into a tail spin in the mean time.

[RGEN]

Moving to C or S on Friday is also part of the Turn of the Month strategy where you catch the last four days of the month. I plan to hop out on July 1st but some TOTM strategies will take you to July 8th.