Market view

Markets did an amazing rally on Friday as I expected on the bullish pattern I saw , you gotta be flexible and I first expected a big sell off below 1200 , but when I did not get it and I began to see bullish patterns forming , then better get out , take a small profit and go long.

Thats what I did where I got long TNA at 43 on Thursday before the big rally,, and I'm still long lots of small caps.

Right now I think this may VERY well be the start of a major rally into year end (the SANTA RALLY) and I expect us to move higher into year end from here.

As I called in early October 2011 the lows for the year at 1080 so far holding very good.

I see a very bullish pattern forming again in the Italian index and TBT looks extreme HOT on the WEEKLY chart , which suggest that mkts is going higher. If the TBT goes up then markets is going up and with TLT going down , markets should go higher - those ones never lies.

I love the setup in TBT and therefore I love the upside to come in mkts too. We need to be flexible because this mkts is dangerous if you dont follow the trend , an overbought market can become more overbought and a oversold mkt can become more oversold. Right now my thesis is actually very bullish into year end now , so right now my plan is to trade all good long setups.

Conclusion:

I flipped from bearish to bullish this week on Thursday as I saw the bullish pattern develop and I'm looking for a "santa" rally , another powerfull nice rally up , I'm expecting to see 1350-1360. Holding lots of good looking small caps at the moment and plan is to buy the very good looking long setups.