Bulls still doing excellent – and have pushed markets to new all time highs hitting 1775. As I got short term sell signals on SPX and buy signals on VIX I mentioned to go long VIX and short SPX. So far markets topped out at 1775 and been moving down since then. I think this could be the start of either 1) Big correction or 2) Bear market has begun.

As my long term targets for SPX 2009 bull market rally is 1780-1800 I think we are in the “end phases” hitting close 1775 we might still see one more rally up to 1800 before new year.

For now we can only say:

1. There are far more bulls than bears now – this is bearish and a warning for bulls.

2. VIX is still low at 12-13 and has bottomed there everytime this year nearly- so this favour the bears too.

3. Nikkei looks bearish to me – I still expect a massive sell off once we break the red trendlines in the triangle

4. Yen looks bullish to me and I would expect a massive rally in Yen with Nikkei sell off.

5. Bradley model giving a turn date and a reversal this weekend.

If Nikkei sees a massive sell off , the risk is also that US will get affected – so mkts could go down then.

Conclusion: The conclusion is that a lot of indicators are still favouring the bears (short term) – too many bulls now – VIX at lower range , major bearish divergences still on SPX. When we look at the bull market since 2009 (take the big perspective glasses on) then I think we are about to see a bull market high. We might see one rally higher into 2014 later this year to make one pop higher – but at the moment I think we are close to a bull market high and when the bear market starts I think it can take us all the way down to 800-1000 area for the bear market.

So all in all – we are getting close now , but wont rule out one push higher still to 1800 probably. Short term bears got the ball and expect some more downside. This could then lead to a larger correction still with 1775 being the top