Market view

Yesterday we closed pretty much FLAT another day in a row - very boring days without no action in general markets - it might be some sideways consolidation before moving higher, who knows? But the 30 min and 60 min chart still have bearish divergences which is very bearish and the volume is drying up from the rally 1250 , which indicates its getting exhausted.

But one thing is for sure - this slowly grinding up , reminds me a little bit about what we saw in September and up. Slowly 0.3-0.5% up everyday with a little gap up. But if I am right we should still see a move below 1250 and thats why I am holding shorts from 1333-1330 and not letting it up , only if we break to new highs SPX I will stop out and take the loss as I think in 1 day the trend can change very fast as we have seen and erase the gains in just a few days.

We have ECB rate hike tomorrow (Thursday) so this will be a big event which will move markets a lot imho - I think the rate hike is priced in already and Trichet needs to tell markets that he is going to hike rates in next 3 months again to cure inflation - if not the euro will sell off.

The funny thing is that many people think that rising rates is a bullish signal for economy and that the economy is on the right path - but this is NOT the reason , the reason is because of HIGH INFLATION , not because of high growth.

Portugal really needs a bailout and the yield they said that the ycould pay was below 7% , now its getting near 10% which is extremly unsuistainable and a possible deffault in Portugal may come , cause they dont have any government yet before june.

Some interesting things on SPX is that the MACD histogram is ticking down and MACD histogram on Nasdaq is already ticking down , which shows a reversal should happend. 30 min chart and 60 min chart still bearish divergences all over this rally since 1250, so lets see if they play out.

And lets take a look at the euro/usd - this keeps moving up also with recent BAD news from EU that one country about to deffault and growth is slowing and high inflation - but who cares cause its running by big boys and manipulation - so lets take a look at the technicals in the euro/usd.

The USD broke down below the big support which is actually bearish , but looking at the EURO I think the euro may rally to 1.425 (trendline resistance or 1.45 ultimate target) thats a weekly trendline resistance. Maybe they all had a target for this area before let the euro move down ? time will tell. In the end the euro will most likely fall apart- cause we are in a moment now , where EVERYONE try everything to cure not a disaster with giving bail outs and so on. But in the end ( I dont know 1 year or 2 year or some monts ?? ) but countries like Greece, Ireland, Portugal and Spain will deffault. Ireland have a a external debt to GDP ratio at 1124% which is HUUUGE! No way they can pay it back to countries , it would take like 100 years or more if they should be paying back and cutting down too, simply impossible. They have an public debt of 111% of GDP and is rising..
The same goes on with Spain a 162% external debt to GDP. Spain has the highest unemployment rate above 20% and with that in mind , it seems impossible to both cut in debt and have growt and fewer unemployed. Its just too sick and Ben Bernanke think we have growth just by lookin at SP500. Well YES BENNIE , you made a GROWTH with your QE1,QE2,QE3 fantastic !! But where did the QE money come from ? US taxpayers !! So right now what is happening is that he is stealing from poort and middle class , by using money to prop up markets and then letting the USD falling and making the purchase power less for each consumer as inflation is rising. I know this is a bubble and its only a matter of time again with the euro and also US going into the greatest depression - cause this is an all time assset bubble.

The fundamentals behind it is sick - seems like Ben Bernanke think by having more and more debt by propping markets up and wall street ( without main street ) then the economy is on track, but after this they also need to withdraw this money , how will they do it ? who is going to buy it all ?? This is simply a sick policy to push billions of dollars to have a "slow growth" , after they will pull out to have a big depression cause they are going to loose jobs and growth when they need to cut back AND rise rates....


But all in all - remain heavy short from 1333-1330 a bit under water now , will take the loss if SPX makes new highs , but until then holding

Have a nice day

The leg down comming - should be more bearish than we saw in March and we should see below 1250.