While away, markets have done their best to rally behind my back. The Brexit reaction has delivered surprising gains - even the FTSE 100 has broken to new near time highs - and it would appear this surprise (is it?) has caught many players on the wrong side of the trade. It's hard to know where to go from here. The summer session is rarely one to get excited about and there is now a multi-year Brexit factor to consider along with a U.S. election to factor. It's hard to be a long term buyer here, but if you are already long there isn't much reason to sell either. Maybe as November approaches things will become clearer for U.S. markets. Market positives are the relative out-performance of Small Caps over Large Caps:

Mix of Work Travel and Vacation has me AFK until August 9th. Surprised to see markets pushing highs given Brexit, but market does what market does :) Posting again soon... You've now read my opinion, next read Douglas' and Jani's . I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro , register through the banner link and search for "fallond". If you are new to spread betting , here is a guide on position size based on eToro's system. --- Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more. Follow Me on Twitter Dr. Declan Fallon is the Senior Market Technician for ChartDNA.com , and Product Development Manager for FirstDerivatives.com . I also trade on eToro and can be copied for free.

Typical, it always feels like markets make major moves while I'm away. So, in brief: [1] Markets (and more reliable forecast/betting markets) got the Brexit vote horribly wrong and it's going to be a long (long) time before market confidence returns: Broken Leave promises, broken Conservative and Labour parties,  a leaderless British government, a half-in/half-out Brexit with article 50 still to be administered, the Scottish/Northern Ireland problem, an EU which will look to throw the UK under the bus etc etc.  There are lots of questions to be answered before markets could consider breaking May highs (when markets had priced for a status quo vote). [2] What does this mean for Europe as a whole, or more pressing, the U.S. election? A Trump victory got a boost with the U.K. populist vote. Imagine how markets will react if Trump does win the November election... [3] The weekly charts had been consistent in forecasting long term weakness. I had highlighted this here if you

Markets plumped for a non-Brexit. While markets closed higher there wasn't the volume to suggest a great degree of confidence in the finish.  As of writing, it would appear the market 'got it right' and an opening gap higher will emerge. What bears will be looking for is a bearish 'black' candlestick, which is a close below open despite a higher close than previous session (day). The S&P is on course to tag upper broadening wedge resistance. Watch for a MACD trigger 'buy' as bulls look to press their advantage.