Market view

The markets did a minor push up on Friday - where it rallied in start of the day , but then all the gains were nearly erased by the end. SPX closed up only 0.3% and the contra trend rally took few days longer than I was expecting , but no matter what - it did a really good job at scooping up all the bulls again to buy back and think they are safe going long markets now.

The USD got a really nice reversal candle - and looks very coiled to do a major move to the upside in the near term. Its hard to say , but we have both bullish divergences in the dollar and bearish in the euro - so that tells me that a major rally is underway in the dollar , and a big drop in the euro.

Overall get ready - cause the big move to the downside is near - and I think it could begin on Monday already. Next week should be a brilliant week for the bears imo and we should see a lower low than 1250 sometimes by next week. As the US dollar is breaking out - we should see the markets do a nice plunge ,, remember we get the EU stress test , which could hurt a lot and give fear , also we have rate hike early April , probably people profit taking before and end of March is usually bearish.

I dont trust at all this slowly drifting higher contra trend rally we had over the last days and remain short from 1333-1330. Its true you could have made more profit selling near the 1250 and then buy back up here , but if you have patience you will do very well just holding for now as we might see below 1200 or near 1220 support. I would really like to see a test of 1180ish area the long term trendline support before next leg higher , so lets see if we can get some fear and some panic selling comming over the next week.

Just a look at the MONTHLY charts I posted it looks so SCARY imho and could VERY well be a long term backtest of the crash 2007 - if this is a long term backtest and the top we made in February is quite accurate to the trendline , and IF markets is in a long term rising bearish wedge since march 2009 as charted - well then we may start a new leg down which could take us below 666 lows in next years.... just some OBJECTIVE charting here and that is if this trendline holds - but for now , looks like we got rejected from it. Monthly chart looks like a reversal bar with a hanging man and we are in overbought conditions. Not saying that markets has topped - but looking at the charts i find it very interesting, so be careful out there... this bull market over the last 2 years may have finnished - we dont know...

I am still very very bearish markets here - at least for the very short term ( this week ) as I think we may see below 1200 still , but possible we test the support 1220 area , but we should still see in my oppinion below 1250. The market did a nice contra trend rally and backtested broken supports from past. The Nasdaq were weaker than most indexes and everything looks poised for a big drop.


This is clear objective but:

1. We might backtest a broken trendline since the market crash 2007 ( if a backtest or called a kiss of death ) then it may spell BIG trouble over the next months - years.....
2. If the 2 year market rally from March 2009 lows is a rising bearish wedge (IT MAY SPELL BIG TROUBLE from here)
3. Market very overbought on monthly and weekly charts
4. USD looks like bottoming out in a long term bottom... all bulls here , nearly no bears 3-4% vs 96-97% bulls
5. Looks like everyone have now the oppinion that POMO saves everything , but who is going to buy when they withdraw?
6. The volume on MONTHLY chart declining over this rally since March 2009 ( does it tell us there is not much more in the baloon ?)
7. Until now the top made in February 2011 - stopped out right at this trendline from a backtest - if we cant take out this high near term - we MAY have topped for months and years
8. I am not saying that I can predict an ultimative top in markets - but its just clear OBJECTIVE and the trendlines fits very well for a backtest and potential bearish rising wedge since March 2009 bottom.
9. It feels like we are complete opposite than March 2009 - everyone feared - today everyone is feeling safe to go long the markets.
10. Short positions at weakest level since crash and its now "unpopular" to short the markets...

This is clearly objective and I am not stating a top - but it might very well be...

Looking at copper chart weekly and daily - big volume surge over last weeks , is someone knowing anything we dont know ? Is it a potential HS top formation ? We will know in the future.

Remember also EU election in Germany where they can vote "against" Merckel and bailouts - that would mean that countries wont get any bailout cause the people in Germany wont spend their money to give to Ireland, Portugal, Greece , Spain , Italy... and so on.

All in all - watch for a fun week