Wow – first of all a pretty boring week like the other 2-3 weeks from early January. After we got sideways more or less markets got another push higher and SPX went to new highs above 2012 highs.

VIX was probably the most unique thing this wee as VIX reaches a new low , at the lowest level since 2007 (where markets topped) all time.

There is NO fear in this mkts yet and this is seen in the VIX.

As I’ve said before , when no one worries , i’m the one who worries as mkts is much more likely to take on to negative news.

1. VIX reaches a new low reaching 12s the lowest level since 2007. If we look at VIX I did not believe we would see 12 to be honest, but still I dont believe its going lower than here either. So the odds for VIX bottoming and SPX topping is pretty high if we look back in history.

2. SPX near a channel up trendline resistance , which means mkts could go a bit further early this week, to then top out. Again we got Martin Luther day on Monday so markets will be closed.

3. Statistics for this week is bearish , so if the bears are still here, they gotta use this week to knock the mkts down again.

4. I still believe the closer we get to the debt ceiling debate (Mid February) the markets will take this debate negative until they reach a deal which they wont do until last minute.

5. TRAN is extremely overbought having RSI(14) to 80 , and normally 70 is overbought, this is extreme. It is hitting a yearly resistance from previous tops too at 2700.

Conclusion: All in all – I still believe we are near a major top. Again its hard to hit and nail the exact top and bottom, and since I went short around 1460-1470 area mkts has not gone far away. I still believe mkts is topping and markets will be down a lot when we are close to the debt ceiling debate. I’m holding my shorts tight , a little bit underwater now and think in the coming weeks it will be a profitable trade. Lets see how long the bulls can hold this rally up.