Thursday, June 30, 2016

This is the Brexit Advice You Would Have Gotten If You Were a Subscriber to the EPJ Daily Alert

 The day before votes on Brexit came in, I wrote in the EPJ Daily Alert (My new bold):
I strongly believe that if Brexit wins (it does, though, appear to be the underdog), then we will have a massive selloff in stocks globally.

This view is based on my thinking that traders generally view a Brexit win as a terrible outcome for global economies. But at the same time, watching market action, it appears that traders believe that Brexit will go down to defeat.

Therefore, if Brexit wins, you will have traders reversing positions and tremendous fear about economies in the wake of such a win. The selling will be substantial without knowing exactly how much selling will occur.

I just suspect that the panic will be very intense immediately after news of a Brexit victory.

It is possible that British and continental European stock markets could selloff by 10% or more. In the U.S., a selloff of 3% is possible. The greater the selloff, the greater the opportunity but I would buy into the selling regardless of the actual percentage. The selling will be most intense immediately after news of a Brexit victory and that will be when the greatest buying opportunities will be.

If the less likely scenario does develop and Brexit does win,  I would buy a 50% position of funds I designated for the trade immediately on the news and scale in further buying over the remainder of the day.

This is what happened immediately after Brexit and how prices closed today for Britain's FTSE 100:

With US stock markets we got two buy points. The first on Friday, the second on Monday, before three rebound days. This is what I wrote on Monday.:
The US Dow Jones Industrial Average is off its low, down 1.31% on the day. For US markets, the panic Brexit selling appears to be just about over. For aggressive investors, continue to add to general US stock index long positions. Also extremely attractive are banks stocks, which are down over 10% since Thursday.
Bank America, Citi, Goldman Sachs. Wells Fargo and JPMorgan Chase are all buys in here for traders. Also attractive is the iShares U.S. Financial Services ETF (Symbol: IYG).

I think you will find it very rare to see such clear detailed  forecasts of how things will develop. I did the same thing when I warned in real time of the developing financial crisis in 2008 (Details of my real time crisis forecast is in The Fed Flunks).

I am now seeing very unusual activity developing in another market, subscribe to the EPJ Daily Alert and find out the details. Four ways to subscribe: here.

(Note: Past spectacular forecasts do not necessarily mean future spectacular forecasts.)



  1. RW Thanks for all the great alerts, 4th year subscriber! I have my investments aligned as you have detailed in the alerts. Spot on on information and analysis.


  2. Well done, RW!

    I may reasonably disagree with you on the economic fundamentals, but want to give you kudos for the market call.

  3. Nailed it! Happy EPJ Alert subscriber :)

  4. 2nd year subscriber and hugely happy with EPJ. Every kind of investor will find actionable insights. RW takes Austrian econ from theory to practice!

  5. Last month was my first subscribing, good timing on my part as well, great call sir! I really enjoy the extra economic trends and analysis as well. Thank you.