Feb 14

Weekend Outlook for 16th February 2015

Markets has been a lot stronger than expected with RUT and NDX making new highs. I did not expect this to happend , however I still see a lot of negative signs with:

1. Transports forming a bearish top hs pattern , has not even broken above January highs. This chart suggest sharp sell off next from here.

2. VXX forming HIGHER lows , so far still above January lows where VXX traded at 30 in futures. If pattern is true VXX will spike a lot higher into 40-45 soon.

3. Gold has been pulling back as widely expected – however I think the move down in Gold is a buy, Gold was 1300$ and as always we get pullbacks. So the near term will be interesting – I think we might have seen a bottom on Gold. Expect a low in Gold around current levels , but not sure if we test 1200-1205 first, but either way should be close to a bottom.

4. Natural gas as mentioned in a post when it hit 2.5 I expected a long term bottom. So far we seen large buyers in this area and if i’m right natural gas has formed a long term bottom here and expect a new bull run up in natural gas this year. Should be a great trade long and if it dips further I would buy for long term hold in nat gas.

Conclusion: All in all if we dont see a Greek deal by Monday mkts could probably react very negative to this on Tuesday. As I see it on charts it looks like no deal this week and a very sharp sell off could occur. However if VIX breaks below MA200 on daily chart I’m forced to step out of my long VIX trades as i’m already underwater on it from 19-20 level. However VIX could spike quickly back up to 19-20 why i’m not bailing out yet.

If i’m right we could see a sharp sell off this week , but mkts will tell me on Tuesday if right or wrong.

 

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