Brexit And The Stock Market

First of all, I would like to congratulate our friends across the pond for their vote.  I was moping around early in the week wondering why the polls showed them likely to remain in the EU.  Longer term, I think the outcome will be a very positive one for the average British citizen.  That is if it actually happens - I notice that the elites haven't given up and they are trying various ways to reverse the vote.  In terms of stock market impact here in the US, the only obvious conclusion is that volatility will pick up until things calm down.  I would caution, though, that I would much rather invest when valuation was more favorable.  I have been fully hedged for a few weeks because valuation is so poor.  While it improved again last week, it is still negative.  It would take another 2% or so of decline before my indicator would allow a modest net long position.  Earnings expectations remain positive and we'll have to wait and see if earnings are impacted in a significant way by events in Europe.  Sentiment is improving but is still neutral.  There is a good chance coming volatility will improve sentiment enough to justify a more bullish outlook from that indicator.  For now, I remain 100% hedged.