Markets had another quiet week ,, nothing big happended and we remain in the uprising bearish wedge from December.

This wedge we should see a breakdown of very soon – I have a cycle date starting early March and going to last into summer 2012 and potentially extending to later this year..

This is calm before the storm ,, its like we are in the eye of a hurricane where everything is quiet before the wild ride.

Looking at the longer term picture for markets I still believe we are in the making of a major top , which we wont see again over the next few years. Markets is going to take out October 2011 lows and go to my target of 750-1000 area on SPX and around 8000 on Dow Jones.

I believe that what we are going to see will be a lot worse than we saw in 2011 — this one could be the big one and most ugly move down in markets , just like we saw in 2007-2008. Based on the weekly chart topping hs pattern this move down which could start anyday from now or early March ,, will probably last until early 2013 before bottoming out.

I believe that we are going to see some more problems soon with the Mid East and political tensions also with Iran. The bullish sentiment we have now may come very quickly bearish again.

For the very patient holders ,, you are going to make a fortune on short ETF’s imo.

Last time we saw TVIX moving from 15$ -> 110$ which is a huge move higher – as I think this move will get even worse I would not be surprised to see it higher , but to be conservative and when we know there is decay I’m happy with 40-50+ ,, but I believe it could go a lot higher over the entire year.

What may be the trigger is a potential Greek deffault then Portugal and Spain could be next. I got into some shorts from late December , fear has been increasing over past 2 weeks with markets moving higher ,, another sign that trouble may come soon… Its harder to call a top as its more of a process than an event. But the picture remains 100% the same and it will be very interesting to see where markets is by summer 2012.

See you all in chat room and enjoy the weekend.