Market view

Market did a very nice drop on Tuesday which I expected and closed below SPX 1320 - but we still need more downside and a drop below 1300 could confirm a bigger move down.

The question remains seen if we drop down to 1300-1307 or so and hold there , then there is a good possibility that we might see new highs above 1344+ , so I am watching this level closely - but I dont think markets did bottom yesterday , as I think we will see below 1310 and near 1300-1307 area support first.

The VXX also looks very bullish to me - and therefore I think VXX will breakout today or very soon - and with that I expect markets to drop more.

Another thing is that there were some BIG open interest in the dollar UUP yesterday and the FXE Euro touched the long term trendline which is drawed and got rejected from there. So the euro looks like a major top is in and a dollar bottom should be in with a reversal bar on daily chart. Someone is betting big on a dollar rally near term - who ? I dont know ... but lets see near term

So there are many things which leans me to be more bearish now with a very bullish VXX and very bullish dollar short term here and therefore holding shorts from 1333-1330.

If you look at the small caps they have been plunging down a lot more and TZA has been moving up 10-15% last days - very big move imho which I alerted days ago with charts.

All in all - holding my shorts and looking for more fear to move into markets as the VIX and VXX have not spiked up above 20 - when we see above 20 near term imho , we should see some more selling pressure in markets.

The question remains - do we hold above 1300 , making a inverse HS pattern which is very bullish and then move to new highs ? Or do we break BELOW 1300 - and then I think good possibility of seeing below 1250 ?

Time will tell near term, but until now the trend is down and remains down with the MACD getting more bearish. Watch out for the MACD histogram in small caps to change from down to up , and then maybe play a bounce in small caps as they have been hit hardest.

Have a nice day

Market view

Markets did another decline which has been even larger than last sessions , which is looking better for the bears. We will get the MACD cross today , so if we are going to have a lower low than 1250 , we really need a good sell off today on Tuesday where the bears needs to show up. If we keep hoovering above 1320 in SPX today , most likely we will see new highs - but if the bears show up on the bearish cross , then we might very well see below the 1250 target.

Small caps were down another -1% which has been moving down a lot last 3 days, good for those who are long TZA where I added when SPX were above 1333.

It looks like our triple and multiple bearish divergences is about to play out in markets as I have indicated some days ago which is usually very bearish.

What was interesting was the VIX was down big with the markets down - which is usually bullish cause no fear , but actually it might be very bearish signal BECAUSE when the VIX is down near -10% and markets not rally up 1-2% on such a big drop in the VIX , then seems like VIX could be about to run up from here and then the markets could be dropping hard. Who knows but according to history as big drop in VIX with markets down is usually VERY bearish markets short term , but bullish longer term...time will tell.

TZA were up near 3% yesterday, so another nice gain, lets see if we get some more upside in TZA today as the SPX is getting a bearish MACD cross. The DOW needs to take out 12.300 to get some follow through down in the markets , so watch that closely.

Looking at euro/usd to see when the dollar will bottom , we might very well be there or VERY close. A long term trendline is near 1.45 on the euro , and I guess we will reach it very soon (currently at 1.444) so lets see last push up in the euro to hit this trendlien and then plunge back down. With ALL the bad news out from EU , does not make any sense at all that euro has been climbing, but technical analysis tells us it want a touch of this trendline before a major drop is comming. At least watch 1.45ish area in the euro...

I wanna point out there IS a possibility that we are forming an inverse HS pattern , if the markets will stop near 1300 SPX and then rally up - time will tell us, but for now I'm still holding short and watching if we get some more bears showing up near term. The short term trend changed from up to down yesterday and gave a sell signal , lets see if we get some follow through to the downside on a possible Terrible Tuesday.


UPDATE INTRADAY :::: FXE the EURO HITTING RESISTANCE , MIGHT BE MAJOR TOP IN THE EURO HERE
Remember to follow me on Twitter - if you still wanna play some small caps on the long side.

Have a nice day

Market view

Markets did decline on Friday - as last week was a very boring week with no moves - but the biggest move we got was end of day on Friday with markets going down near -0.5% and small caps down near -1%.

But we have not got a confirmation yet that the down leg has begun - we need a follow through this week. We are about to get a lot of inflation data this week.

Markets is still overbought and we are about to get a negative MACD cross on the daily chart - which should give momentum to the bears again. The question remains then if the bulls are strong enough to hold the MACD histogram on daily chart above zero line - if so we might rally up again , but I still believe that this is the beginning of a leg down to below 1250 SPX. I would say the chart of TZA looks pretty bullish to me with a possible bullish MACD cross on daily chart today ( Monday or Tuesday ) - if se we could expect a nasty move down in markets soon.

Looking at the VXX chart it looks very bullish to me - why ? Its oversold now and over the last month we have seen big time volume here which (usually marks a bottom...) cause big money is buying and know whats going on... we broke the big downtrend since last year and started moving up, now VXX got a good pullback on low volume ( as you see on chart ) which is bullish for VXX and looks like its starting for a new leg up, time will tell, but either way technicals on markets looks very bearish to me right now.

We should see the bearish MACD cross in the beginning of this week ( Either today or Tuesday ) so lets see if we see a follow through to the downside. My plan is to remain short 1333-1330 still and hold as long we dont break above 1344. If we breakout to new highs in SPX I am going to take the loss - but until then my target remains we see below 1250.

Market view

Portugal asking for bailout now, with a euro rally yesterday - how sweet it sounds. Guess we need more countrys out there to ask for bailouts to make the euro rally higher ;-)...

Overall markets had a VERY good reversal day yesterday as we touched 1340 SPX early trading and then reversed down too red zone , until they tried to hold markets up again at the end of the day. Markets were up 0.2-0.3%...

Well today and tomorrow should be the days were there will be some ACTIVITY in the markets - cause it has really been a boring week ( either consolidation before breakout higher ) or topping formation before plunge.....

The ECB is going to hike rates by 0.25% which is expected - Portugal asking for bailout 1 day before ECB rate hike , somethings up ?? Do they want to raise the rates as a country in EU cant even handle the low rates now ?? And now they are going to RAISE rates ? Oh yeah - sure we have growth I forgot and we need to raise rates cause we have growth. That is NOT the reason , but only because of high inflation, so question is today - do they want to raise the rates as Portugal needs bailout ? I think euro will sell off if they just hold the rates as expected - but they need to signal higher rates in the future to make the euro rally higher.

Tomorrow we have a deadline of government shutdown in the US - and they are talking about a 4billion cut or so ? They cant agree on a little cut of 4Billion , when in reality they need to cut some TRILLIONS guys.... comepletley insane, 4 Billion is lower than 1 day in POMO action which is near 6-8 BILLIONS.

If you were sick and went to the doctor and the doctor said to you , I will give you a much higher dose , do you think you are healthy then ? (Like QE1, QE2) - if the economy is good , why are they spending more than DOUBLE the amount like last time , just to hold markets up ?

Okay enough about the real fundamentals - but Spain may be the next to get bailout and there is not enough money for EU to bail them out...

Not much to say , still looks like SPX backtesting the broken trendline , very overbought now and the volume is decreasing with bearish divergences on 30 min and 60 min chart - will it play out ? Thats what I think and I have a target of near MA(200) test at 1200.

China (FXI) and Brazil (EWZ) looks very bearish too

So overall I am still holding big shorts at 1333-1330 and thats my plan - if we take out SPX 1344 I am FORCED to take the loss , which is sad , but true - so if SPX making new highs I will take the loss and play the bubble up...


Have a nice day

Market view

Yesterday we closed pretty much FLAT another day in a row - very boring days without no action in general markets - it might be some sideways consolidation before moving higher, who knows? But the 30 min and 60 min chart still have bearish divergences which is very bearish and the volume is drying up from the rally 1250 , which indicates its getting exhausted.

But one thing is for sure - this slowly grinding up , reminds me a little bit about what we saw in September and up. Slowly 0.3-0.5% up everyday with a little gap up. But if I am right we should still see a move below 1250 and thats why I am holding shorts from 1333-1330 and not letting it up , only if we break to new highs SPX I will stop out and take the loss as I think in 1 day the trend can change very fast as we have seen and erase the gains in just a few days.

We have ECB rate hike tomorrow (Thursday) so this will be a big event which will move markets a lot imho - I think the rate hike is priced in already and Trichet needs to tell markets that he is going to hike rates in next 3 months again to cure inflation - if not the euro will sell off.

The funny thing is that many people think that rising rates is a bullish signal for economy and that the economy is on the right path - but this is NOT the reason , the reason is because of HIGH INFLATION , not because of high growth.

Portugal really needs a bailout and the yield they said that the ycould pay was below 7% , now its getting near 10% which is extremly unsuistainable and a possible deffault in Portugal may come , cause they dont have any government yet before june.

Some interesting things on SPX is that the MACD histogram is ticking down and MACD histogram on Nasdaq is already ticking down , which shows a reversal should happend. 30 min chart and 60 min chart still bearish divergences all over this rally since 1250, so lets see if they play out.

And lets take a look at the euro/usd - this keeps moving up also with recent BAD news from EU that one country about to deffault and growth is slowing and high inflation - but who cares cause its running by big boys and manipulation - so lets take a look at the technicals in the euro/usd.

The USD broke down below the big support which is actually bearish , but looking at the EURO I think the euro may rally to 1.425 (trendline resistance or 1.45 ultimate target) thats a weekly trendline resistance. Maybe they all had a target for this area before let the euro move down ? time will tell. In the end the euro will most likely fall apart- cause we are in a moment now , where EVERYONE try everything to cure not a disaster with giving bail outs and so on. But in the end ( I dont know 1 year or 2 year or some monts ?? ) but countries like Greece, Ireland, Portugal and Spain will deffault. Ireland have a a external debt to GDP ratio at 1124% which is HUUUGE! No way they can pay it back to countries , it would take like 100 years or more if they should be paying back and cutting down too, simply impossible. They have an public debt of 111% of GDP and is rising..
The same goes on with Spain a 162% external debt to GDP. Spain has the highest unemployment rate above 20% and with that in mind , it seems impossible to both cut in debt and have growt and fewer unemployed. Its just too sick and Ben Bernanke think we have growth just by lookin at SP500. Well YES BENNIE , you made a GROWTH with your QE1,QE2,QE3 fantastic !! But where did the QE money come from ? US taxpayers !! So right now what is happening is that he is stealing from poort and middle class , by using money to prop up markets and then letting the USD falling and making the purchase power less for each consumer as inflation is rising. I know this is a bubble and its only a matter of time again with the euro and also US going into the greatest depression - cause this is an all time assset bubble.

The fundamentals behind it is sick - seems like Ben Bernanke think by having more and more debt by propping markets up and wall street ( without main street ) then the economy is on track, but after this they also need to withdraw this money , how will they do it ? who is going to buy it all ?? This is simply a sick policy to push billions of dollars to have a "slow growth" , after they will pull out to have a big depression cause they are going to loose jobs and growth when they need to cut back AND rise rates....


But all in all - remain heavy short from 1333-1330 a bit under water now , will take the loss if SPX makes new highs , but until then holding

Have a nice day

The leg down comming - should be more bearish than we saw in March and we should see below 1250.

Market view

There was not much to say about yesterday , pretty much flat and a boring day with no changes to the analysis - that a big move to the downside should be comming and a breakdown. We are still in the rising bearish wedge with more than a triple bearish MACD divergence , which indicates that this rally is "overdone". But again - who knows if they are going to run the markets to SPX 1420 or so ? - Well in that case I am going to take my loss on shorts at 1340-1344 if we move to new highs , cause I wont be on the long side if we do that.

But all in all , volume light and many bearish divergences, what to come ?

Overall daily chart on VIX looks bullish here more than bearish and the SPX chart looks very bearish at the moment.

We have this weeks biggest event in EU with a rate hike on Thursday - its already priced in , do they have more rate hikes in pipeline or what ? If not - EU will sell off imho and USD will rally.

Also on Friday we have something BIG event with DEBT , as in US they must find something to raise the debt limit.

Overall there were some big fat buyers in the SPY put volume on Monday - so I dont know if the big boys know something we dont know ? Time will tell - but may come some very interesting things over the next 1-2 weeks.

Market view

Markets did another minor uptick but retraced most of its gains near day end on friday. Markets did go above my original short positions at 1333-1330 and I added to shorts when we traded there. We are still in a very steep bearish rising wedge and a breakdown of this should take us lower next below 1250 SPX. I still believe we are going to take out the 1250 and the copper is showing a clear HS pattern where it will breakdown of it soon.

If copper is any leading indicator watch out for markets to fall down this comming week. We have ECB with rate hikes comming this week, not much economic data , but everyone has priced in a rate hike in EU, so might be a sell off after news.

Also watch MENA countries , Japan and comments to QE2/QE3 which could make the dollar breakout and the markets breakdown.

Overall still heavy short and markets did close below resistance 1333 and we closed 1332 - that was not bullish for the bulls as we did not close above the resistance, but below. We should start already this monday with a nice decline. The VIX made a hollow red bar , which is bullish and a start of a new uptrend. Markets overbought again and the VIX got oversold on daily chart - ready for another move higher.

30 min chart still a TRIPLE bearish divergence if not 4 times.. MACD making higher highs 4 times but MACD 4 times lower lows - that is VERY bearish. VXX have a triple bullish divergence also telling that fear should come into markets again.



Keep a close watch on thet bearish rising wedge - cause when we break below the support we are on the way back below 1250.

Have a nice week