Drama and Theatrics

The sell-off after the Brexit vote should be respected not so much because of the actual decision itself, but rather some of the vicious downside reversal many charts made off recent highs, such as PCLN. 

Moreover, when we put the sell-off into context, it is hard to argue that we are witnessing a "buy the blood in the streets" moment, just yet, despite all of the drama and theatrics which, at first blush, seem like an overreaction.

As an example, the VIX multi-decade look, below, shows the move is barely noticeable compared to some seminal moments over the last four decades in the market.

There are a few ways to interpret this setup, which I will flesh out for Members over the weekend in my full video Strategy Session. 

In the meantime, a defensive strategy over the weekend is likely correct, as we could just as easily see a Central Bank-coordinated goosing of liquidity as we could another round of jittery Sunday night futures markets. 

Have a great weekend!