Art Cashin and others have noted for the past few days stories about hedge funds and other interested observers doing "private polling" that might indicate the vote to stay is stronger than many think.
My response: hedge fund polling? You mean the same hedge fund geniuses who claim they can outperform the market and never do? Those geniuses?
Me, I'd rather take my cue from watching Kayla Tausche. If this kind of weather keeps up, she won't need an umbrella, she'll need Noah's Ark.
I'm nervous because there is what could be called "asymmetric risk" in the stock market. In plain English, the market has placed all its chips betting that the vote will be to remain, so there will be a huge surprise if the leave vote wins. Limited upside for the markets if the vote is to stay, but a big downside if the vote is to leave.
You can see this in almost any stock chart. The German DAX, for example, started moving down early in June as polls indicated mounting support for Brexit. It dropped almost 7 percent for a week before bottoming (essentially near the time of the murder of British MP Jo Cox), and then has come all the way back. An almost perfect V! Or at least a U.
It's the same with the S&P 500. It went from 2,100 to 2,050 and almost completely back in the same two-week period.
It is the same with many individual stocks. Look at material stocks like Freeport-McMoran: it dropped from $12 to $10 and back to $12.
EOG, one of the big exploration and production stocks, moved from $85 to $79 and back to $85.
The big industrial Caterpillar went from $78 to $73 and back to $78.
See what I mean? It's like there's been amass hypnosis. No risk to the downside.
The most recent weather report indicates it will rain heavily for the next three hours. Somebody throw Kayla a life raft!