Uncertain Uncertainty

Well that really was some week !! The opposition Labour party seem intent on keeping BREXIT off the front pages with an infight that to me has no clear ending and The ruling Conservative party are playing hot potato with Article 50 ... Politically the greatest loser this week bumbling Boris Johnson who clearly never thought he'd "win" the leave vote but would garner enough good will in defeat to mount a challenge for leader once Mr Cameron's time was up and is shown up as a political chancer who didn't really believe what he was campaigning for ... anyway enough of this ...

 The markets ... Stocks... a huge win from Tuesday onwards for the BTD (Buy the Dip) brigade ... it happened again .... As i mentioned last week for this to be the beginning of a new bull run we need a significant sentiment shift and by that i mean i want to see doom and gloom posts i want to see crash predictions . My timelines across social media this week were 85/15 bullish stocks biased ... various twitter sages patting each other on the back having successfully caught another piano... Pundits lording the FTSE 100 rise to yearly highs (More a factor of a currency devaluation on an index whose earnings are heavily skewed away from the UK) and more complacency .. even more than last week if that's at all possible.

We have 2 positions , lets start with our nasdaq short .... heres the updated weekly chart ...

Note the lower low and lower high here on the weekly ... still holding the downtrend with this coming shortened holiday week clearly going to be very important ... 4510/15 is the top of the channel for the coming week and i'm using this as our stop ... we did takeout and close above the major averages last week but something just doesn't feel right (Sentiment Sentiment Sentiment) ! Clearly world stocks took their Q from Europe this week and the amazing rally in the FTSE 100 (A mixture of currency deval and a good old fashioned squeeze) .. Very interesting to note stocks massive underperformance relative to treasurys as measured by the etf TLT ... This has been a very leading indic for stocks and the kind of underperformance seen this week suggests to me that this puff up fails and we fall hard ... my first target is still bottom of the range 3800 .


And so to our second short .. GBP USD (Cable) ... updated chart below ...

An almost perfect technical setup ... The down trend support , broken early in the week then held any upside perfectly ... we still need to push below the major 20 yr support with some real conviction ... a days trading below the level should be enough but price action stinks ... The UK is in a real mess and no obvious path out which leaves the market with its one major fear ... UNCERTAINTY ... The longer this mess drags on the lower we will go ... Governor Carney managed to pull the rug out of any rally by talking rate cuts late on Thursday and i'm not expecting this rhetoric to change anytime soon ... Market trades value long and very vulnerable to firstly 1.25 then over an extended period to 1 ! Stay short add to shorts on rally back to trendline !

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