Market view

Markets did decline on Friday - as last week was a very boring week with no moves - but the biggest move we got was end of day on Friday with markets going down near -0.5% and small caps down near -1%.

But we have not got a confirmation yet that the down leg has begun - we need a follow through this week. We are about to get a lot of inflation data this week.

Markets is still overbought and we are about to get a negative MACD cross on the daily chart - which should give momentum to the bears again. The question remains then if the bulls are strong enough to hold the MACD histogram on daily chart above zero line - if so we might rally up again , but I still believe that this is the beginning of a leg down to below 1250 SPX. I would say the chart of TZA looks pretty bullish to me with a possible bullish MACD cross on daily chart today ( Monday or Tuesday ) - if se we could expect a nasty move down in markets soon.

Looking at the VXX chart it looks very bullish to me - why ? Its oversold now and over the last month we have seen big time volume here which (usually marks a bottom...) cause big money is buying and know whats going on... we broke the big downtrend since last year and started moving up, now VXX got a good pullback on low volume ( as you see on chart ) which is bullish for VXX and looks like its starting for a new leg up, time will tell, but either way technicals on markets looks very bearish to me right now.

We should see the bearish MACD cross in the beginning of this week ( Either today or Tuesday ) so lets see if we see a follow through to the downside. My plan is to remain short 1333-1330 still and hold as long we dont break above 1344. If we breakout to new highs in SPX I am going to take the loss - but until then my target remains we see below 1250.