Market view

As widely expected - markets got a pullback and closed in RED wednesday which were no surprise as we were working off some very OVERBOUGHT short term levels.

Remember - markets been up 4 days in a row and healthy with a pullback. Over the last 4 days markets has broken some IMPORTANT resistances - and USUALLY when you break a resistance... markets come back and BACKTEST the resistance which acts as SUPPORT then. So what we saw yesterday were a POSSIBLE backtest of a broken trendline as you can see on the Dow jones chart - SPX chart where we have a possible backtest.

On QQQ we have a possible amazing looking inverted HS pattern forming - which means it wants a gap down to 54.5 level or so before a MAJOR rally underway by end of this week or early next week.

So for now its all about buying the dips - I am holding ALL my TNA shares from 68.8 entry and looking for more upside after this little pullback. My personal feeling is that we get a little minor pullback or gap down today - and after that we should stabilize and then by end of day we should begin a major rally which will take SPX above 1300 level by either tomorrow or early next week. Upside target is still in the 1320-1330 range and we might even possible go further up - who knows.

Everything has been playing out so well over the last months so thats working out pretty well - so QQQ telling me a minor gap down to form right shoulder - but dow jones and SPX seems like a backtest and then we might just gap up and run today - but as the 30 min charts is still not oversold I favour a little gap down and then buy this dip before we get the largest rally - above 1300 and to 1320-1330 near term.

As you have seen over the last 1-2 days small caps has been on fire , lots of stocks is going nicely now up 20-30-40% this is the time to play small caps - so find the best ones as you might make a pretty good profit - or follow me on twitter I will post my trades on small caps too.

Have a nice day