Market view

All in all - a quiet day, markets did not move a lot but is still below overhead resistance. The materials did push up and made it right shoulder in a big HS pattern as you can see.

The next drop is in line with a break down of this HS pattern and SPY did close right below MA(20) and MA(50) which acts as resistance. The dollar is about to make a major breakout with the euro making a big plunge here soon on Portugal worries.

Portugal said NO to austerity plan - which was a PLAN to get the bailout. ECB requires that the Portuguese must cut down debt somehow to get a bailout plan..........but today they all rejected and in the media you hear that they rejected plan and now must ask IMF and ECB for bailout ( THATS not very new news , we all knew that Portugal must get a bailout , but how will they get the bail out and how will the come off with the debt and how will they pay back the loan from IMF ? ) thats the question we will hear over next days with EU summit tomorrow and Friday.

Also we have massive protest on Friday in Yemen and Syria, the Japan have cant drink their water now and there are still major problems. The US home sales data were VERY ugly today - and still war in Libya - but WHO CARES ?? The US markets went up , what I mean with this is that FUNDAMENTAL NEWS or so on does NOT drive the markets , but ALWAYS LAGS the markets. The only thing WHICH works is TECHNICALS in this stupid market, which is played by big boys, and computers.......its not a free market...

But the technicals told us that we were in due for a bounce - cause everything got very overbought in shorts and the VIX. Take a look at VIX , now came back down to test support and NOW the VIX is ready to RALLY back up again.....after the pullback (technicals tells me so)

So all in all technicals telling me that we are ahead of a major drop , and if I am right we should begin tomorrow..(Thursday)

I think the contra trend rally is done and as I have been saying over last days that this was only a contra trend rally , the volume is declining with markets moving up and we GAPPED up from bottom , not GAP down and then up which is a bottom. So target remains still that we see below 1200 end of THIS month...... 100 points in 1 week - going to be a funny ride.

Everything in place now with the USD about to breakout big near term with the euro falling apart with Portugal , Ireland and Greece - and who knows if Spain and Italy comes in the picture now ?? (What I mean is that I dont think EU will go down now , but sometimes ... yes ) but I think lots of fears near term now which will make the market crash or plunge big time like we saw in 2010 april flash crash. If SPX takes out 1200 and moves accelerates my target is the support trendline on PF chart at 1080-1100 AREA ; do I sound bearish ? well .... I AM for good reasons...

Time will tell , I remain short from SPX 1333-1330 big time and holding - patience is required , but big profits will be made $$ thats how you make them.

Have a nice day