Markets kept holding strong on Thuersday before a longer weekend than usual. I still remain long SPX since 1295 and 1305 area where I got long and up with nice profits, I have taken profits but still holding other long positions. My outlook havent changed yet - the inverse HS pattern if playing out will have us to go a lot higher, but I really question a rally higher from here as we are EXTREME overbought at the short term now.
So what I think at the moment is a possible gap up on Monday to make the new highs above 1344+ which I have been calling for and then possible hit 1350 mark. If we see new highs on Monday I am going to take profits and move into shorts (Just for the short term) as I think we at least will just have 1 or 2 days pullback as the VIX is below the lower BB and when VIX moves above in the bollinger bands again that will give a sell signal in markets. I expect that to happend sometimes next week. I am also watching a trendline and we could be trading in a kind of triangle pattern with upper trendline at 1344 at the moment (recent highs) so there is lots of questions.
But for overall I expect a last pop up before a pullback, so if we gap up monday I am thinking about taking the profits and move slowly into some shorts. (Just for a pullback)
The VIX made a red hollow candlestick which usually marks a bottom - so a good possibility that VIX wont go lower here - but again , we might even see VIX near 12-13 if markets keeps rally up now.
I still think oil will see near 140 a barrel before topping this year and then a good move down again to below 100 a barrel later this year.
Oil looks ready for new highs early next week imho.
Remember I am extreme bearish markets overall in the longer term and according to fundamentals - but for now short term trend remains up and no signs of a crash move yet in markets.
Have a nice weekend and enjoy
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