Market view

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Back from my vacation and ready for the markets again.

Markets has lately been quite choppy - both up and down but we ended higher near SPX 1230 yesterday - with many multiple bearish divergences.

Looking at my charts right now - I would think this is an exhaustion run and I think the real pullback to 1170 area is comming soon from here.

The VIX is right now on a buy signal on my daily chart - which suggest that fear could easy come into markets short term. When the VIX is rising the markets is most likely going down - therefore I think there is better chances that markets starting a pullback to below 1200 again near term and possible reach my pullback target at 1170 area.

All major indexes is currently on sell signal but can fast get to buy signal if markets starts to rally further form here - so dont get too confortable getting short yet.

As I called early October for bottom 2011 is in - right now we had an impressive if not one of the best performed rallies in single weeks since march 2009. I called the bottom at SPX 1080 and right now SPX is 1230. I still think bottom of 2011 is in and we are just in the beginning of a new and big rally higher in markets.

However for this week get ready for big price swings - both up and down , which can be hard to trade for many people.

Right now all I can say is that most indexes on sell signals with VIX on buy signals - however if we rally further up with conviction on Wednesday I will most likely get buy signals and then we may touch 1250 area before getting any pullbacks.

But right now I think we are near the end of the "first" leg up in markets from bottom 2011 before the pullback and a pullback could come anyime - we just need some confirmation of reversal as markets still seems quite strong.

By my thesis markets could rally into later this month before we get a correction/pullback - so if we follow my thesis we should remain long until last week this month.

Conclusion:

Right now I'm mostly in many small caps and trading good long setups - have a lot of cash - I'm neither long or short right here. My thesis tells me to stay long until later this month , but charts tells me pullback is due very soon after a possible last push higher.

On the TRAN you see I called the bottom 2011 near the exact date and exact bottom of TRAN. TRAN is currenlty 700 points higher than my call at 4000. If you made some money on my call - please make a donation.

Have a nice day