Brexit Polls Will Drive the Market This Week – Outcome Will Be Known Friday

Posted 9:30 AM ET - As Brexit polls go, so goes the market. Over the weekend two polls gave a slight edge to the "stay" camp. The S&P 500 is up 24 points before the open this morning. This is a major binary event and it will drive global markets for weeks to come. The outcome won't be known until Friday. If England remains in the EU, the S&P 500 will make a new all-time high. If England leaves the EU, the S&P 500 will test the lows of the year. The surprise component is on the downside. England is the second largest economy in the EU and it will rattle the entire union if it leaves. Credit concerns will surface and currency markets will be in a flux for weeks to come. Central banks are injecting liquidity and financial institutions are overstaffing trading desks. This is a binary event and the vote is very close. From a trading standpoint I am not carrying any overnight positions. I am day trading. I don't trust the early rally today and it needs to prove that it can hold the gains for at least 30 minutes before I jump in. Ideally, we will get a pullback and support will be established. I would feel much more comfortable getting long in this situation. As the trading day unfolds, I will use the first hour range as my guide. If the market is above the first hour high, I will focus on longs. If the market is below the first hour low, I will focus on shorts. It's very important to stay flexible in this environment. We could see other polls this week that are contrary to the two polls that were just released. Asset Managers will be adjusting risk. If VXX falls to 13, I will get long into the vote. I might also buy BZQ if it falls below 30. Apart from that, I plan to day trade and I will wait for the results. Look for choppy trading this week. As the polls go, so goes the market. . .

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