Ok so what an interesting week we got with Friday major reversal to downside – was it a “fake out”? Was it too obvious just into weekend trapping bears – or was it for real, start of a new large correction ?

This week we will find out…..

Here is my view:

1. SPX looks still overall strong , we had 4-5 days where markets went up with NO pullback , then we got 1 day and erased most of the weeks gains……. however we remain still above important supports…..

2. As long SPX holds above 1840 I believe that we should rally higher into mid 1900s before topping out , however the Friday reversal + bearish divergences makes you a bit nervous , so we MIGHT have topped out near 1900 – but my call is still that we are not topped out just yet.

3. NYSI tells us mkts still overbought and on a sell signal , this is saying mkts can fall a lot more still and to be cautious….

4. VIX hit the MA200 from below which is usually not the best for VIX ,, you want it to make a clean break above MA200 and not test it from below, this COULD be bearish for VIX and bullish for SPX early this week….however overall VIX remains at LOW levels here at 12-13 imho……

5. Gold i’m very bullish on , I think we rally higher and could see 1500-1600 going into this summer 2014.

6. Statistics showing us to be careful , it predicts a mid April high in mkts , a possible “blow off” top into mid 1900s possible….. after this a massive correction coming.

Conclusion:

All in all – I believe that as long SPX holds 1840 , it could be a fake out on Friday to get most out of stocks , so my view is still that we rally higher to mid 1900s and then we start a massive correction afterwards…. however , IF and only IF we should break 1840 , the markets is DONE finito and a correction will start…. so this will will be telling, very interesting…..