Market view

Markets did a sharp move down in the markets un some nasty job data - where we plunged -1.3% but ended higher over the day (as statistics said , buy the gap down on job data day and sell at close ) would make money there..

Overall I think the trend changed yesterday - I've got a BUY signal on all of my 3x short ETF's on Friday - so there is a very good chance that we changed direction. I have a bottom date late next week - so I would really love to see a hard decline sometimes next week - with some panic late on the week.

VIX looks ready to explode higher - take a look at the interesting chart from stocktiming - with the rounded bottom on VIX , very interesting indeed..... if so , VIX should spike higher soon....

The dollar UUP looks like its about to do the major breakout I have been waiting for.... to break the 1 year downtrend line as you can see on charts - with this euro should plunge hard and markets should follow with - commodities should sell off too. So the question is , if we get a hard rally in the dollar next week... Thats a critical week for either a breakout or breakdown in the dollar - but as I read it - I think we have a major breakout and bull run to come in dollar.

DUG (short oil and gas) looks like one of the most pretty inverted HS pattern - which says a big rally to come here - which means big plunge in commodities ( with a higher dollar probably???)

Time will tell - I remain long TZA and holding cash - I think this comming week should be really ugly especially late on next week. We might have a minor gap up on Monday - would not rule that out.. but after that I would expect a hard decline from Tuesday.... and over the rest of week.

When I read the VIX chart - it tells me that fear should come into markets the next week - so lets see what will trigger this...

So what is VERY interesting - now look at XLF financials.....long term view. Monthly chart we had a BULL run from march lows and tested 38.2% fib retracement from the highs in 2007. We have been moving around this level for many months - but if you look at MACD histogram - its decreasing and about to get a NEGATIVE MACD cross.....

So what does this mean on MONTHLY charts? It most likely means we are about to see a MAJOR flush in the financials this month - where it could possible test the support around 12.43-12.5 area soon based on monthly chart....

Going on a bit shorter timeframe 1 year - we also might have a giant topping HS pattern with right shoulder at 15's XLF - the head made at 17 - and right shoulder now at 15's again.... do we reverse here??

What do the HS pattern measure for downside ? It measures to 12$ .... does that say something similar to the monthly chart ? Yes a possible move to 12's in XLF which is a major move down..

It will be a VERY interesting month and could be some heavy selling pressure imo based on monthly and daily chart now. If financials start to plunge soon - then I'm the first to tell you that they could flush down hard soon...(what do we have next week ? EU BANK STRESS TEST.... uh surprise.... well nothing is for sure , we might also rally hard - but many things point to downside to come.

My plan is to hold all my TZA 34.69$ as long I have it on buy signal - for now got a buy signal on Friday and as long it stays above 31$ there is really no worries. So it might gap down small monday to 31 and then up from there - it could see 34-35 level very fast if it starts to move up - s thats what I am hoping for at least to get out break even or in some nice profits.

The topping HS pattern might still play out ... just not so sure about it anymore.. price/action next week will tell us.

Have a great weekend and enjoy.