As expected markets continued with sell off and confirmed that the correction has now begun. (Or if this was a major top). I have no clue if we move higher this year or not - but for the short term outlook the trend remains DOWN and we will continue to see weakness as long SPX is below 1327ish area. I think there is a good chance markets may have a bounce soon - cause we got on trendline on SPX, but other indexes have flushed below that trendline which have me worried for the bulls.
I'm heavy short SPX 1300-1333 as I got an early sell signal and holding as long markets holding below 1227ish.
We have Ireland Election comming up tomorrow and we have US debt ceiling latest 4th March. The VIX clearly brokeout to the upside on weekly chart and broke a big falling wedge since April/May 2010. So I guess there is a lot more downside to come - but we will get small contatrend rallies in the meantime , but all of these should be shorted heavy into....for now looks like we could get a contratrend rally - but I will not bet on going long the markets yet. We need a clearly flush and still expect markets to move to 1180 area sometimes end of March or early April. But if the short term trend changes and we get buy signals we will cover shorts and take profits and get some long positions , but until then the trend is still down....
Have a nice day !
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