Believing in the accuracy of polls once again, bulls were slaughtered as the BREXIT vote reversed late polling results calling for an exit vs remain.

The shock hit stock markets globally quite hard.

It must be said in the U.S. at least the declines only wiped out, and then some, all of the previous silly rallies. In other words, bulls were caught wrong-footed which created some panic selling.

And, while the declines were sharp and much more to come as former Fed Chairman Greenspan noted, “…it’s just the tip of the iceberg”.

And another word regarding the ineffectiveness of poll results, especially lately, you might remember California’s recent poll showing Clinton vs Sanders was quite off. When there are telephone polls, how likely are these to be accurate when many likely voters don’t even have land lines any more. Just a thought.

One common theme between the UK result and U.S. sentiment currently is with anti-immigration. 

The Dow fell over 600 pts, S&P 76 pts, and Nasdaq over 200 pts. Losses were widespread as only gold and bonds were able to rise. Currency markets were roiled by vote outcome. Pundits with product to sell you were universal in their "stay-the-course" mantra, this was not a 2008 replay and so forth. 

Major losses were felt in the financial sector where banks are presumed to bear losses in loan exposure within the eurozone. Losses were heavy with Lloyds Bank leading the charge lower by nearly 25%. Frankly, I thought losses in most markets were relatively minor compared what many expected after the results were tabulated. Clearly, Central banks have plans to inject liquidity to markets to stem sharp losses.

Below is the heat map from Finviz reflecting those ETF market sectors moving higher (green) and falling (red). Dependent on the day (green) may mean leveraged inverse or leveraged short (red).

Volume gigantic while breadth per the WSJ was negative.

Chart Of The Day

It’s apparent Bulls jumped the gun on BREXIT results seduced by bad poll data.

This led to significant losses as they had to close those positions. Volume this day told the story on those positions which were quickly stopped out.

What’s next is anyone’s guess. I liked Greenspan’s comments which would lead one to believe tough times are ahead over the intermediate term. To my thinking this could be over the next 1 to 3 years. Remember to exit is to negotiate terms and that’s a political issue.

Let’s see what happens.