It is 11:35 pm edt and US stock index futures are cratering due to no vote tonight. There are a few pretty huge implications for tomorrow's session because of this.
1. Major players will be selling early tomorrow. Summer weekend lack of liquidity will worsen the trading conditions later in the day. Big guys will sell in AM and hit the road to vacation homes.
2. To exacerbate the things further, preliminary 2Q GDP will be out @ 8:30 am edt, followed by Chicago PMI @ 9:45 am edt. I think if those two are weaker, we are going to have a climax selling into European close @ 11:30 am. Stabilization at lower levels will be the plan for the rest of the day, especially if politicians throw nasty accusations at each other on national TV about who's fault it is that we are going to default. Will not be pretty at all folks.
3. Dollar index is getting weaker just after "no vote" news. I suspected this would be the outcome if Washington train derailed. Wait for further weakness to get back into buck. If your stops (after scaling out some) are still below here, hoping not to get stopped out is the only thing left to do. I still think DXY gets it going if end of the world is the theme of the next week. Give it 24-48 hours to sink in. Anything below 73 is a screaming buy. Just look at treasuries. They are up as I type! Aren't we about to default??
4. Do not get complacent. It will definitely not be a one way street. SPX 1284 and 1275 are supports. There are a lot of money sitting and waiting to get in on weakness. We are in the middle of the earnings season which produced above expectation results, with respectable guidance as well. So investment public is ready to buy, as they have been taught for decades, on weakness.
Good Luck tomorrow.
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