US Equity Markets continued to mark time by staying locked in a tight trading range of 3% since digesting the Brexit vote. The real focus last week was the meltdown in the British Pound after British Prime Minister announced that Brexit was no joke and a formal withdrawal notification will occur in 2017.

Thoughts that Brexit will hit harder on their economy than expected, caused the pound to have a “flash crash “on Friday, down at one point 6%.  From our perspective it was less flash and just more of an old fashioned crash as new lows came every day starting on Monday.

So far the tally on denizens of the British Empire is that their currency is down about 13% since the vote, and their stock market is basically flat. Clearly, their stocks are not reaping any benefits from the pound’s devaluation. Be careful what you vote for.

To the contrary, the decline in the pound led to a rise in the dollar, and a nasty collapse of the crowded long Gold trade. Gold (GLD) and the gold miners (GDX) managed close just a few ticks under their 200-day moving averages by Friday’s close, but sunk 4.6% and 12.1% respectively.

This week’s action in gold is a heads up and a potential trade setup. Both GLD and GDX are testing sharply rising longer term moving averages which is usually good buying opportunities after such a sudden flush.

Regarding the bigger picture, the longer term weekly trends in Gold are positive and intact. Furthermore, if Brexit causes the instability that was anticipated prior to the “exit” vote, the flight to the yellow relic could easily resume after this bout of indigestion.

Of course, the question that matters most to trend in gold is whether or not enough of the weak holders have just been shaken out, and this remains to be seen.

We’re on the lookout for a Slingshot or similar positive short term pattern to set us up with a well-defined trade opportunity

Another related and noteworthy global macro trade setup is the coiling wedge setting up in the Euro which has yet to decide how it’s going to respond to the crises.

Will the Euro break the buck and head back down to the mid 90’s or shrug off the loss of an old friend and run back up to 1.30 or more?

Here at home, our key “risk on/off” stress metrics like junk debt (JNK) versus US bonds (TLT) and others are steadily improving while, the pure technical conditions and price patterns of the stock market are iffy at best.

The S &P 500 is sitting just below the 50-day moving average, and its market internals are retreating. Volume has been increasing on the downside, and some sectors are losing altitude. On the bright side, the New High/Low Ratio has recovered to bullish levels, but the absolute number of new highs remains subpar at under 100.

In short, the sum of the parts analysis adds up to a mixed message at best, so it’s important that we dig into the details such as the key levels to watch in this week’s video.