Brexit Brush-Off Continues

 | Jun 29, 2016 | 11:40 AM EDT
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I can't tell you how many times it has occurred the last several years but it is still amazing how the market can completely shrug off major negatives and go straight back up like nothing happened. The S&P 500 is still down since the surprise "Brexit" news but the loss is relatively minor -- the index is only about 3.5% from all-time highs.

For the second day in a row, the point gain is big and breadth extremely strong. The idea that stuck bulls and aggressive bears would sell into the strength has been completely undermined.

There is strength across the board, some of which is due to end-of-quarter window dressing, and there is particularly good action in metals and biotechnology.

While these V-shaped bounces cause much celebration for the bulls they aren't that easy to trade. If you took prudent defensive action on the Brexit news, there hasn't been any subsequent basing action to allow for easy rebuys. It is straight down and straight up, with no pauses. This is what has led hedge funds to underperform so often in recent years.

I'm woefully underinvested but recent metals picks such as Silver Wheaton (SLW), Seabridge Gold (SA) (my stock of the week) and Teck Resources (TCK) are helping out. I started a new position in Williams Partners (WPZ), an oil refiner with a good yield.

The bears are growing a bit anxious to short again but they better move slowly. Moves like this have a history of lasting longer than seems reasonable.

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