Market view

Markets did another plunge yesterday which were really nice as the SPX and DOW jones still needed to move down to my objective targets. If you take a look at SMH and Russels - actually SMH were up near 1% yesterday - and Russels were also green, but closed in red with -0.3%.

Overall those indexes are leading markets - and Russels got a bigger plunge before SPX , SPX just followed Russels down.

The thing I was watching yesterday were the trendline at 1336-1337 area (Backtest of trendline from inverse HS Pattern) - in the end of the day - we actually broke this level which gave a pretty hard sell off into close. But all in all Russels kept holding well so far with SMH which means that the pullback now is done pretty soon.

As called last week the dollar made a short term bottom and were rallying with the markets taking a breath - the question remains now if the dollar will keep rally up - cause then markets is likely to step further back.

When we were trading at SPX 1370 my first objective target was 1325-1330 on SPX for a pullback - we are very close to this level now - as we saw 1330 got tested yesterday. But as we broke 1335-13340 range my target for SPX pullback is 1325-1330 which we most likely could see today if we gap down and then we have some multiple big supports in this area.

So what am I thinking ? Right now there are just so much bearishness out there imho - Sell in May go away , markets falling many days in a row - no QE3 and so on - which I like a lot cause thats just more fuel to another massive rally i believe is comming.

To me it looks quite a lot like an ending diagonal on SPX which is forming - so around 1325-1330 area we should start to bounce from a trendline in the ending diagonal. SPX 1325 is also horizonta strong support.

So what to expect after this pullback is done which I have been calling for - well get ready cause I think a massive rally is right around the corner with 1380-1400 target , so possible new highs to be expected!

I got long TNA yesterday and still holding 82.7 - small caps looks bottomed imho and thats why Im long now- if we have more downside to SPX 1325-1330 its very limited imo so its time to grab some longs and good quality companys.

So for today I hope we could see 1325-1330 before next week and if we see it - thats really time to load up big positions on the long side.

For some long quality stock plays I love GMXR here - I've added more yesterday at 5.16 - as I think a massive inverse HS pattern is setting up.....the target would target 9$



Have a nice day