Market view

Markets did a backtest of broken support (green trendlines) on Monday - and NASDAQ and Russels pretty much FLAT yesterday, with the SPX and dow jones a little bit higher.

Overall - we need to TURN and reverse DOWN here and now - if not I will get the confirmed buy signal ( mostly above 1330 ) that would be confirmed and the dow jones above this "red downtrend trendline". I still think the correction begun last week and we wont reach new highs - but if my swing trading model gives me a buy signal I will go out of shorts break even or with small profits from 1333-1330 and stay cash for now to wait it out. But overall markets should reverse from this point so what we did was making a lower high, before making a lower low....

So still expect a move below 1300 and to 1250-1270 short term. The dollar is also right now a CRITICAL support zone on weekly chart around here - and IF the dollar wont crash - it should rally big time from here , cause if we break below the dollar could turn out very ugly. The dollar is still right at trendline zone support here and any day from here we could see a major breakout. Here is a great chart from columbia. We are RIGHT at the big trendline(76-77ish) and upside target remains 87ish, but we really need a major rally in the dollar starting up here and not breaking down further....so the dollar should not see BELOW 76 , which is the lowest level from support...right now dollar is trading 76-77, so around here.

I favour a breakout in the dollar to 87ish target next months though and with that a move back in markets sometimes in March below 1200.

Time will tell - if markets wants new highs let it be - I will go cash then and wait out for the next sell signal then, but until then markets needs to breakout above downtrend line and above 1330 and close there.

Its first day of month and markets ALWAYS extreme bullish today on 1st day , so if we follow history and the manipulation going on first day in month - then we could see new highs today.

In Mid east its about to get out of a civil war - Saudi Arabia is getting more attention too - and the Germans have elections this month too , where the Germans wont bailout other PIIGS. Portugal most likely needs a bailout before april - but if Germans wont give bailout and increase fund we will see how markets react. We also have US debt ceiling 4th March (Friday) so they have to come up with a good agreement which markets likes...

My guess is that they raise US debt ceiling another dime ( means no shutdown ) but they may cut spending a lot and surprise most which slows growth. FED Ben Bernanke will speak today and tomorrow and you should expect the unexpected.

Good luck to all