What an amazing week – we started early of with some very nice selling in markets where we started going long SPX 1358 as a hedge position to our shorts – and then markets had the little bounce we were calling for. After that we predicted that the bounce would end near 13.000 area in the daily blog posts and we got nearly right on it on Thursday. We picked up shorts on Thursday before close again and Friday morning and after that markets started to sell off again. Excellent week for traders long and short.

Overall the picture remains very very bad for the markets – this week will be very telling , I believe if we get heavy selling this week then it might be selling without no real bounces until sometimes in May month. The cycles remains negative right now from mid April month so I think there is a very good chance that we might drop further on.

The next short term target is the Dow Jones 12.100ish area which is 900 points below from the levels we had on the bounce spot.

Again remember the period from now on until this summer 2012 ,, june/july should be very ugly and I’m expecting a possible crash coming by June, so the closer we come to this month the more panic markets could start to be. We got French and Greek elections coming up in May month and this could be something which could further trigger more difficulties to the euro.

I expect the US dollar to fly and it might very well start taking out new highs in the next months for the last years. The US Dollar should rip a lot higher and I expect it to reach 90ish level this year.

I believe that the markets have topped out at 1422 and what we have from now is the beginning of a very long lasting bear market – so yes we will again get many kind of sharp bounces , but the long term trend will be down.

I also believe that we will take out October lows 2012 and even go down to March 2009 lows again from here in time.

If you take a look at EU markets they have clearly topped out and some indexes has already plunged more than -10% from the highs in mid March where I called for the markets to top out before the month of April. US markets held stronger but did also top out , just in late March month.

We should follow the EU down and this week we started to see us follow the EU markets down.

Conclusion: All in all ,, the best way is just to be in shorts and hold the shorts tight imo , I believe for this week should predict the next “big move” ,, if we go down ,, then we could see selling all the way into May , but if we go up we could see a rally into May.

I believe we will get the selling looking at the VIX weekly and monthly charts , looking at the overall US indexes and the dollar position. All in all we made some good money on the bounce and now ready for a good sell off in the markets for the next leg down.

The closer we get to June/July the more potential we are to get a coming CRASH by 2012.

See you all in chat room on Monday morning and enjoy rest of the weekend