After FOMC this week mkts took a sharp move higher which was a bit unexpected to me. I had expected a larger correction has started – but when I look at different charts I see it very likely that we have a move higher…..

So what I would be watching for this week is this:

1. Watch SPX , if we break below 1810 likely it was a fake pop as I see some bearish patterns both on DAX and RUT – however i’m leaning about 70% chance for a breakout higher in markets and IF we did this , I would expect a move to 1840-1850.

2. If you long VXX/VIX I would put a stop at 13 , VIX needs to show support here and start to move higher early this week – IF it fails I would stop out of shorts so keep a heavy eye on the VIX near term.

3. NYSI has pulled back and “suggest” a possible move higher in the near term and a santa rally – statistics is also bullish so this might also suggest a move higher.

4. DAX also has a possible topping pattern but needs to stay below 9400.

Conclusion:

The conclusion is I’m leaning a bit towards the bulls now as we got a higher move than expected and SPX already new all time highs – however if we get a move below 1810 early this week it might have been a fake out, but for now I give chances about 70% to bulls and 30% to bears. If you are short mkts then I would put a tight stop loss on shorts , because usually the statistics for the coming weeks are rather bullish.

I’m still bullish on both Gold and Silver as long they hold the summer lows – Gold remains a bit weaker than silver and silver is already holding a lot stronger. Keep a heavy eye on stock market early this week , should be a tell where we are heading near term. If we sustain above 1810 early this week my upside targets is around 1840-1850.