Markets is now close to 3 year from the March 2009 bottom at 9th March – where we are now doing a near 78.6% fibonacci retracement from the 2007 highs and 2009 lows.

The number for this retracement is 1381 area so we came pretty close to this level last week with the highs at 1378s.

It took markets a 1 and a half year to go from 1576 in 2007 to 666 in 2009. Now we have been moving up for 3 years and is making a retrace of the big crash 2007-2009.

What I see here is that markets is forming a “major top” that means ,, not just a major top since October lows – but a possible major top for this whole rally since 2009.

If we look at Nasdaq (NDX) its very close to some major resistance if you look back on it last 20 years ,, we are right near it ,, there may be a little grind higher ,, but we are at it imo +/-

Remember I’m not trying to catch the small movemens in markets ,, but the much bigger swing plays ,, take a look at Russell and NYA and Transports,, they have ALL been lagging the SPX and techs in this rally and is still way below the top in 2011 , so no confirmation of this.

As AAPL running higher QQQ is blowing higher and they have iPAD 3 announcement this week at 7th March (Wednesda):

I believe that its possible they run AAPL up until this date on Wednesday at 7th March and then to sell it off hard after announcement.

I remain as bearish as I can be and think this is actually the worst which is yet to come. I dont think we have seen anything more bearish than what is to come over the last 3 years ,, I’ve called for big declines ,, but I think this one is going to be the worst decline ,, so get ready for it.

I have a date which is early March (this coming week 5th March to 9th March).

We should see a “Major” reversal in markets sometimes this week , I’m not sure if they hold us up until iPad earnings on Wednesday 7th March or not ,, but we might also have topped out this past week.

But all in all ,, when we look at March month I see a possible “crash cycle” by end of March month (last week of March) where we could see something potential like what we saw in August 2011.

Conclusion:

As I called the bottom in October 2011 at the lows it was easier to call a bottom on panic selling/buying ,, right now markets been grinding very slowly higher last 2 months – but “fear” indexes have already been bottoming out so far. NYA TRAN and RUSSELL is not confirming this move in SPX and QQQ either ,, so what is yet to come is calm before the storm imo. This is what I’m expecting and I think its going to be the most ugly we have seen since 2007-2009. Actually I think we could see something similar to what we saw in that time ,, it did NOT take a few weeks ot play out ,, but I think this is a major high we are making which we wont see over the next couple of years.

That is why I remain extremely bearish on the markets ,, maybe as bearish as I have never been before at the moment. Just by this summer 2012 I think that you will see why I remained so bearish at those levels. Remember gains over past months could be erased in 1 or 2 weeks only,, so we take the stair steps higher but elevator down.

For this week, we might already have a reversal to downside beginning of week, but I think its possible that they can push mkts up to 1381-1384 to hit the 78.6% fib retracement before and hold mkts up until iPad 3 on 7th March. But after this ,, we should for sure imo get a big reversal to downside ,, and here in March I dont think it will be quiet ,, I think we will get the voilatilty back again. The worst crash cycle is to begin late this month.

Those buying short ETF now imo will make a fortune just in some few weeks and especially months from here. I remain heavy long voilatility.

– Chris