Market view

As expected markets moved down more - actually the Japanese markets is in "crash mode" not seen before 1987 , the european markets were down -4, -5% today , but the US did not care a lot like standard ?? We went down near 2-3% but, then got a very nice intraday bounce so we only went down about 1%. What happended was that overall markets did plunge down below a gap support we had and bounced up to the gap which act as resistance now. Market topped today right at the gap which is bearish and signals more downside to come near term after this bounce.

Looking at TZA which is inverse small cap ETF - we got the FIRST break in 6 MONTHS above MA(50) which is a BIG break for small caps. We found support right near MA(50) in TZA as we gapped above it this morning, that was the first signal that more downside ahead, as for now the MA(50) should act as support for the near term.

What all this means is that the upside from the close is VERY limited and means we should not trade above 1300 SPX before plunging down further. A lot of people I know of buying the dips here and have done it last weeks, but in the end they will get screwed, I think the sell off just started today and sucked in more bulls in the bounce up - so lets see near term.

Also remember its OPEX week and violent swings in markets is to be expected. The short term trend is down and as long we cant make a move above SPX 1305 we should plunge further down. The level to watch is 1305 on SPX and should act as resistance - until then we should still see below 1200 end of this month.

But what was interesting today was first breakout in TZA with good volume above MA(50) not seen the last 6 months - so lets see near term if follow through on this.

Looking at the WEEKLY DOW jones looks like we are near MAJOR MAJOR support from March lows , if we break down below that , we could plunge fast and get a crash type of move....

Near term will tell , but I think we break down from that trendline....looking by weekly charts looks like a start of a leg down. IF and only IF markets is going to rally - watch the 1300-1305 for STRONG resistance.

Overall still short SPX 1333-1330 level and HOLDING all as we just begun the decline.