Most everyone was worried about the fallout from Brexit given the price action in European markets in the weeks leading up to the decision and lack of precedent for such a move. However, thus far the bark has been worse than the bite as our markets have retraced about 90% of the move down on the S&P 500 and we're printing weekly reversal or hammer candlesticks off weekly charts. The key breakout level comes in at the 2,120-to-2,135 area which has capped our markets for the better part of the past 20 months.

Let's take a look at the Weekly S&P 500 chart:

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Chart Composed by The Informed Trader Courtesy of Stockcharts.

While our markets have retraced about 90% of the move up post-Brexit, those in Europe are up between 40% and 60% and lagging some as any fallout would likely be more direct there.

Next, lets take a look at the Dow, which mirrors the price action on the S&P 500. The bulls here again have defended our major 50-day and 70-day exponential moving averages after a decent post-Brexit shakeout move. The key pivot here remains the 18,000-to-18,350 all-time-high region.

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Chart Composed by The Informed Trader Courtesy of Stockcharts.

Both charts look like the move down post Brexit was a shakeout candle with the bulls coming in off our 50-day and 70-day exponential moving averages to defend. Note how well the 50-day and 70-day exponential moving averages caught the several moves down back in years 2012-to-2014 in the chart above.  

To sum up, as long as we hold our 50-day and 70-day exponential moving averages, we continue to hold a positive macro bias towards the overall market. A convincing move through those Supports of 2,025 S&P 500 and 17,300 Dow would change the outlook. For now the market looks to be making another run at the breakout levels of 2,120-to-2,135 in the S&P 500 and 18,000-to-18,350 Dow. Let's see if we can get a convincing move through those pivots after basing out for nearly 2 years.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.