Market view

Markets did an extremely wonderful and powerfull reversal this week , which I predicted would happend - and already now in huge profits.

Silver and gold are crashing - took huge gains in my ZSL from 11.85$ swing positions (short silver) which I have held last weeks with patience - paid me off big time.

My TZA , DRV , EDZ all in huge profits already and for this week I'm in the "profit taking mood".

This means I'm going to take profits in case markets fall further early this week. My downside target is still below 1100 and very possible 1000-1050. I think WHEN we break below 1100 - we will get a fast panic drop and people would ask ( where is the bottom now....) people will panic sell and it could get nasty.

My thesis tells me that we should see a lot weakness early this week and in case we drop below 1100 early this week (monday, tuesday wednesday) I'm going to take profits off - cause I believe we are going to see a major major bottom in markets soon.

My feeling is that this is the last leg down in the markets - before a more suistainable big rally - more than this choppy weak rallies.

I think our time will come soon - and I have been riding this markets down in my short positions excellent and made huge profits - time will come to ride this baby up again , and we are ready for it.

SPX falling wedge target is still 1020 ( big drop from here... ) but its possible.... but the best thing I look at is a move below 1100 SPX to make a new low - then to make a bullish MACD divergence on the daily charts , which is a lot more bullish than no divergence.

The VIX is getting very close to a breakout of the bull flag - this would target a move to 50+ which I think will be the last move and push up in the VIX before a bigger correction in VIX.

I'm think we are in a bear market and think we wont make new highs - but I see a much bigger rally comming after next weeks - so I'm calling for 2011 lows sometimes over the next 1-2 weeks from here.

Overall hope you have made a lot of money - staying patient then you would - I really hope if you have made some money by reading my blog , I would appreciate if you made a donation. This is work I do for free every day - so hope for your support.

I'm also in www.nwatrading.com doing both daytrades , intraday analysis as swing trade and small caps - so come in there - they have made a killing last months.

Conclusion:

Remain short markets via TZA (44) , DRV (11) , EDZ ( 19.7) - sold my ZSL this week and I think a bottom in markets and a major bottom is near. I would like to see some very strong and early sell off early next week , with a move below 1100 on SPX. All major indexes is still on a sell signal.

SPX target is still 1000-1050 and I'm going to take some profits as soon we go below 1100 SPX.

Transports have already broken down to new lows and Russels did the same last week. Waiting for SPX to do the same next week.

Enjoy weekend ! :-)