Markets saw a surprising drop since Alibaba all the way from 2020 to 1960s , which is about 80 points on SPX. This action suggest to me that something is breweing which might be MORE than a short term pullback.

I had hoped for markets to rally a lot higher with the thinking that MA50 on SPX would hold. But as SPX turned below 1980 and 1976 this told me that markets might already haved topped out at 2020 and started a very large correction.

So here is my view:

1. It looks like markets saw a MAJOR top at 2020 , if we cant break above 2000 on SPX in the coming days I really believe that we made a longer term top at 2020 and a large correction might already have started.
2. VIX still seeing a very bullish pattern on the fear index like I did few weeks ago. It looks like it will be playing out to upside which means we are going to see some powerfull and heavy selling.
3. DAX still have a very bearish top hs pattern target 8000, which is a large drop from current levels. If DAX cant break the MA200 or MA50 to upside very soon it looks like we will start another heavy sell off, a break above 9700ish on DAX would be bullish though and this means DAX would likely see above 10.000 and new highs.
4. With mkts possible topping Gold might be bottoming and about to see a bullish MACD cross with momentum. As long Gold is in the 1200 I think it looks bullish.

Conclusion: So what will this week bring us? Well to be simple , this is a decision time for markets. Either this was a quick small pullback before a big rally to new all time highs or this was the start of a large correction. I favour the large correction has started. A break above 2000 would be bullish for markets but as long SPX below 2000 I cant get too bullish after last week drop from 2020 to 1960s which I think was powerfull to downside without any major news.

Time will tell , let the markets speak for themselves and act by it.