Markets has been holding up extremely well past 1 week with bulls so far remaining in control.

However looking at the VIX is is also holding up quite strong if you take into account SPX actually has increased to nearly all time highs again.

So here is my view short term.

1. NYSI is extremely overbought now , this suggest that some kind of downside SHOULD occur. However NYSI remains on a buy and bull signal like mkts showing us strength. But the warning is that it looks like stocks is due for some kind of pullback or larger sell off still.

2. VIX remains at low levels holding up very well vs the move higher on SPX. I guess VIX will see a short term move higher which means either a hard sell off due or a pullback due.

3. Gold looks like a short term top is due very soon and a larger pullback coming. However wont rule out last push up on Gold before it takes a pullback. Either way Gold is a good trade for 2014 and I think we are going a lot higher to 1500-1700 during 2014 this year.

4. Dow jones very weak vs rest of indexes, that is a bit of a worry for bulls.

Conclusion: My conclusion is that I would expect some short term weakness in markets early this week. Expect at least a move down to test 1800 before we go higher ,,, and if we dont stop at 1800 and sell off further, we might take out 1740 lows…. so all in all, short term I would expect bears to take the ball.