Market view

Markets did a minor pullback early trading and then picked up into close which were quite bullish actually. I thought we could pullback a bit more as markets has rallied since 1295 where I got long and still holding longs as my main target has not been reached yet.

On the longer time frames it looks like a big rising wedge which is very bearish , but we are still in it and we may still go higher before we breakdown of it. But sooner or later something gotta give - if its QE2 ending or not or we get QE3 , thats a big question. I for myself think we will get QE3 or rather say Bernanke will do EVERYTHING to get it - but may not get it if other rejects it.

The thing with QE is that we have too much inflation and already now its hurting a lot on companies and consumers. This will destroy the economy if inflation stays at these high levels. Prices really need to go down as it is only a question of supply/demand and the prices is too high now as the value of the dollar is also weakening.

But overall the short term picture looks quite bullish and my main target of SPX 1350 is still in the cards or a new high above 1344+

We are trading in a ascending triangle on the short term picture and I think we could breakout of this in the short term. Probably when Bernanke is going to open his mouth this week about the economy. But after a big run I was thinking more of a pullback to 1320 but seems like we wont get it ant just consolidate sideways like we did yesterday above 1330.

HDY my top pick for the week increased on a red day yesterday from 4.41 to 4.48 and is still looking good for this week. Lets see how it will do rest of week.

The short term trend also remains up so its harder to bet against the short term trend. The inverse HS pattern wants us to go way higher from here , but for now we may only go to 1344+ before a bigger pullback and then probably a big summer rally ? Who knows.... 1400+ in summer ? We shall see - but my personal target and objective target remains at 1350.

Remember I called a major top yesterday in SLV at 50$ and still holding by that call so got a few longer term ZSL yesterday as I think 50$ was a blow out top and psychological barrier. Time will tell if I'm right but thats my call.


Have a nice day