Market view

Wow what a week! We had a big POMO day Friday and rest of the month, but didnt rally big today. We have actually had lots of POMO days now where we didnt rally. So if everyone think markets moving up with POMO and it wont move up, everyone will be scared and sell because they think all POMO days is up. Well first of all my short term target was 1196 area and we got there.

If you are bullish this markets this area on Friday was your "buying opportunity" before last rally up to new highs.... So lets see what next week brings us. Remember I told you days ago that FXI, EEM and other indexes got the most bearish readings put/call ratio and until now Shanghai was down -5%! Well I still think we are heading lower, the weekly dollar chart looks bullish and the weekly euro chart looks very bearish.

I also posted that the NASDAQ backtested its broken trendline and that it was a kiss of death before a plunge ( and Friday we saw a nice plunge in the markets .. ) also the MACD got a bearish signal on the histogram and went negative.

VIX is still in its huuuge bullish falling wedge and is "knocking" on the upper trendline now and increased over 10% indicating that fear is comming back to markets.

Well so what do I think at the moment ? Do we get our last rally to 1250 in SPX and higher over next weeks with huge POMO days everyday ? Or de we just plunge and screw everyone ?

Bullish sentiment is the highest in the whole year and with insider sell/buy ratio at extremes and never been so high I must say that I think we are heading WAAY lower....I think the selling pressure is just beginning here and we wont make new highs, but make lower highs from here and lower lows.

Fridays readings for the PUT/CALL ratios the most BEARISH readings was EEM, SMH and XLE which is Emering markets, Semiconductors and Energy sector.

This tells me and indicates that there is more downside to come short term in these markets and we hare heading LOWER. My weekly chart for the dollar is VERY bullish and weekly chart for FXE is very bearish.

Lets see if China make increase their interest rate should make the markets sell off a lot more. Monday will be critical and if we break the falling wedge monday it looks very good for the bears and VERY bad for the bulls. So monday need to be an UP day for the bulls to be in charge still if not the bears are in control.

VIX weekly chart also look very bullish here imo and I can see the VIX rise for the next weeks to come. Its coiled to breakout of this falling wedge....

Isn't it ironic that every time the market tanks it is never our fault? Today we blame China, in May it was Europe but it never seems to be the US that is to blame for anything. If we lose jobs, blame China. don't blame the US companies who moved the jobs or the unions, environmentalists or high taxes, no blame China.

If the dollar goes down we blame China too calling them currency manipulators. Really? Their currency is pegged to a basket and they have strong growth. Was the US manipulating the dollar when our economy was strong? The dollar is falling for a very good reason, we are printing dollars like mad. Our government issues massive debt and the Fed is monetizing debt and all the mistakes Wall Street made.

Guess why we need QE2. It is because we can't sell all the debt we issue, who wants to buy US bonds that yield next to nothing and the currency declines daily. Do you want a 2 year note that yields .5% if you are lucky while the dollar went down 8% in a month? What idiot nation would buy them? What we had today was a sell off in stocks to drive people in to the "safety" of bonds. It was well planned being that the Fed was buying today as well. There is a huge bubble in bonds and the banks who borrowed for 0% from the Fed to buy them are stuck with trillions worth of bonds for which there are no buyers. The Fed is doing QE2 to cash out the banks before the bond bubble implodes.

The G20 told the US to go home, our problems are self created. Stop spending, stop bailing everyone out and stop printing money. Go grow your economy! Free trade has worked out well for Asia, not so good for the US. Once we opened our borders to unlimited imports, we killed our own economy. Corporations will go where ever the labor and taxes are the least.

Now maybe, just maybe, all the selling today was because the market went up for 9 weeks on the announcement of QE2, today it finally began and traders are selling the news. The market shot up, this is profit taking. Wall Street managed to sucker fresh retail money in, now they are doing what they do best, steal it.

We don't need to have a reason for everything or someone to blame, all we need to do is look at how we are running things here and to always remember that Wall Street is out to rape you blind. They aren't here to make you money, they are here to make money for themselves, up or down.

Still bullish the dollar and bearish the markets.

Have a nice weekend and enjoy life !