The Closing Look

Stocks fell hard on Monday as the post Brexit selling continued from Friday. We have no idea how these rating agencies are still in business (after missing all of 2008) or why anyone listens to them, but stocks sold off after Standard & Poor’s lowered the United Kingdom’s sovereign credit rating from “AAA” to “AA.” S&P cited last week’s referendum as the catalyst. In the short term, stocks are very extended to the downside.

Gary’s Thoughts: Put buying spiked indicating heavy fear and bearishness. It is end of quarter as well as pre-holiday. And…the market is about as stretched and extended to the downside in 2 days as we have ever seen…so would not be surprised to see some relief back up. It would be quite normal. We cannot begin to tell you what kind of damage we have seen in foreign markets affected. Wow!