Though the conversation surrounding the outcome of the EU referendum continues to heat-up, during the last 36 hours, the market has already decided on which side is going to win.

Two key defensive elements, in particular, are pulling back as the final count down unfolds.

The Volatility Index or VIX, after a brief surge in early June, has backed-off and dropped into a more moderate risk level.

Gold, which often rises during periods of global unrest, appears to have also crested at same time as the VIX.

And the S&P 500 is starting a mild rebound leading up the critical vote.

Bottom line: Though the Brexit vote is still undecided and over a day away, the market is already casting its vote on the outcome.

Price levels on two key defensive elements, the Volatility Index (VIX) and gold are already beginning to roll over and retreat.

Though a reversal of trend in both the VIX and gold are still possible, the probability of the market getting the direction of the vote right is a more likely scenario.

By Donald W. Dony, FCSI, MFTA
www.technicalspeculator.com

COPYRIGHT © 2016 Donald W. Dony
Donald W. Dony, FCSI, MFTA has been in the investment profession for over 20 years, first as a stock broker in the mid 1980's and then as the principal of D. W. Dony and Associates Inc., a financial consulting firm to present. He is the editor and publisher of the Technical Speculator, a monthly international investment newsletter, which specializes in major world equity markets, currencies, bonds and interest rates as well as the precious metals markets.

Donald is also an instructor for the Canadian Securities Institute (CSI). He is often called upon to design technical analysis training programs and to provide teaching to industry professionals on technical analysis at many of Canada's leading brokerage firms. He is a respected specialist in the area of intermarket and cycle analysis and a frequent speaker at investment conferences.

Mr. Dony is a member of the Canadian Society of Technical Analysts (CSTA) and the International Federation of Technical Analysts (IFTA).

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