Market Commentary Fri, June 16. FED, RLYP, IONS, Brexit , Gold+ Market Forecast.
Yellen was a bit more dovish than we though she would be yesterday. There is not going to be a rate hike anytime soon. Subsequently, the USD is likely to weaken for a time, then strengthen as Britain is like to vote to leave the EU union. Most 'experts' think the chances are 40%, we think the chances are upwards of 70%. Upon an exit, we think both the EURO and the USD will show strength.
Basically, this is part of the ploy to increase global leverage over time, notwithstanding the fact that China's Yuan will receive SDR in September.
Ultimately, next week is going to be rough for risk assets and we could potentially see a move that challenges the $SPY lower end of the upper channel, which is the $204 area.
However, we think after next week there will be a huge buying opportunity as bonds that are already over bought, will see even more inflows. Considering this along with the likely over shorting, we see a big short squeeze set up emerging along with strong inflows back into risk assets.
Gold is at the resistance level of 1300 and may go a bit higher, maybe 1320, but ultimately $JPM will do what they always do with the gold trade -- paper it to death. I explain how in the video.
I'm holding off on $RLYP right now and waiting to see if it shows signs of confirming a short squeeze there to potentially $21 by week end. The over all pattern with a quad witch opex tends to support a pin area as low as 206, to as high as 209.
While there has been put selling of June $19's and $20's. there is also a counter balance call selling still in play. Because the sell off we were looking for did not materialize today in the AH session on Veltassa scripting, our trade thesis must now be rethought.
Any trade we engage in, you will be first to know -- please make sure you are following the private twitter feed and have mobile notifications turned on for that twitter handle. This is the fastest way for us to get real time trades to you. Composing an email takes too long and takes our eyes off the trading screen for again-- too long.. This benefits no one!
I also talk about IONS and BABA a bit in the audio. Audio is 16:36 minutes long.
Scott
