I still stand by my call by mid March that markets topped out , actually the only markets who has been moving higher since mid March is US. If we look at EUROPE and Asia they are already well below the mid March highs and I believe US to follow up shortly with the European markets.

The interesting thing is that financials + small caps (RUT) + Materials (XLE) is still below the MID MARCH high I called for a top ,, the only indexes been higher is dow jones and SPX. The thing is neither BULLS or BEARS has made much progress in US stock markets over past weeks , as we have been more or less SIDEWAYS. For this week expect some large sell off with a break below 1540 on SPX which would start the selling.

1. VIX been moving higher and trending higher , with higher lows and higher highs this is usually like this before correction begins.

2. RUT XLE, XLF(Financials) still below mid March highs , those are NOT confirming the move up in dow jones and SPX.

3. TLT been moving higher and looks like a bottom was made in bonds near term , expect mkts to slide down coming weeks as bonds moving higher,

4. As I called in January that US dollar to rally and euro to go lower , so far we had this and expect more upside in US Dollar in the coming weeks with euro moving lower. Of cours EURO could bounce but I think we will see lower levels on euro.

5. I called for top at 1560-1570 on SPX and Dow Jones around 14.500 and expect a LARGE sell off , much more than most people think in the next weeks. SPX however need below 1540 to start the correction and dow jones needs a break below 14.400 before we really can start to see some selling.

Conclusion: So all in all – I believe we are just ahead of a major correction and most likely much bigger than most people think. It looks like most people only think we get a nice little pullback before higher or small correction. I think we could see a much bigger correction in the next weeks ahead which should surprise most people. US dollar been moving higher last months as called for USD to be strong and euro to remain week. So all I can say is that you should remain very cautious at this stage as we could see a nice wipe out quickly in markets. We start with new quarter Q2 and hedge funds now got some good stats to show for Q1. Q2 could be a game changer for mkts , we might see an April fools rally , but expect as we get more into April that we get some selling pressure.

I remain heavy short markets from current levels (14.500s) and SPX (1560s)