What an interesting week, starting up very bad with a continuation 6th days in a row to the downside, to then have a major rally higher into end of week.

I stated in the daily outlook that there was a possibility that a bullish count might take place for a rally and as we broke 1345 bulls went into control and now looks more possible for some more rally before the next leg down in markets.

I took a loss as UVXY got back below 7.9$ in most account,, a hard but big one – and then for my own personal account I’m holding it for a longer term swing. My upside target remains 20-30$ area but looks like we might see it a bit later this month or early August.

As SPX broke above 1345 I think its possible we see a move to 1380-1400 area still.

So looking back in time SPX topped out at 1420s which I believe was the top of the YEAR and possible next YEARS……as I’ve stated early this year, markets to make a LONG TERM TOP and so far this is holding and I believe we wont see above 1420s anymore.

World markets topped out in March 2012 and I’ve said that March would be the month I expected the markets to top, if markets moved higher from there my long term count would be wrong but so far all world markets topped out precisely in March 2012.

We need to be objective and flexible, the MARKETS IS ALWAYS right no matter what and as we broke 1345 on Friday the bulls is now 100% control short term.

So all in all conclusion is:

– I think we are going to have a fast sharp rally to test 1380-1390 area sometimes this week , both 30min and 60min is overbought so suggesting a pullback before higher, however I cant rule out that we have another sqwiize higher early this week to test those levels and if we do, I think this would mark the top of WAVE 2 up.

– The same goes on with VIX hoping for it to make a lower low to target 14-16 area this week , as this would suggest a BIG move to upside coming ,, as we get a bullish divergence on daily chart on VIX + Bearish divergence on overall markets , both suggesting a nasty decline to come.

Looking at VIX I see MINIMAL downside , and after the downside target I’m looking for a move to possible 30-50.. so be prepared for this.

Hope you enjoy my charts and see why I’m short term bullish for this week but longer term ,, still extreme bearish….HOWEVER if we somehow goes down hard below 1335 on SPX Monday ,, then I think bears will strike hard to downside, but markets needs to prove me that first.