Feb 9

Weekend Outlookt for 11th February 2013 – Bulls so far had their “weakest” week of the year

The week ended barely in green.

1. SPX ended up from last week close 1513 to close at 1518 so they managed to gain 5 points for the whole week.

2. Markets overall had their “worst” days for the entire year , Monday were down -1.2% and Thursday we got a good fast intraday sell off. This suggest that bears are alive and they will be trying very soon.

3. VIX is making a MAJOR rounded bottom formation or a major IHS pattern , this will result soon in a huge breakout to upside in VIX , so far it is still fairly low and muted but the trend has been HIGHER in VIX for past week , this is a sign that FEAR is getting back into mkts.

4. TLT bonds showing signs of life for first time since November lows in markets. As TLT moves higher expect mkts to head lower, this is a sign of RISK OFF coming and as TLT catching a bid , this is imo a reason for markets to soon head lower.

5. NYSI is already having a bearish cross and heading south from EXTREME OVERBOUGHT levels , much more overbought than last year highs. This suggest that we could see a MAJOR correction and not just a little one.

6. SPX ended with a WEEKLY hanging man formation , this is a bearish candlestick reversal pattern , so if we go red this week , we would confirm this pattern and top in markets.

7. EURO already got a lot lower this week and as euro starts to move south , markets usually follows up , dollar strong as I expected and this would put pressure on mkts.

8. EU markets already topped out and some of them is RED for the entire YEAR , DAX lost a lot and this is usually also leading signal that US is topping.

Conclusion:

Not much to say other than ALL INDICATORS are pointing to BEARISH view of markets. Buy to sell ratio is extreme high , just the same as it was few weeks before 2011 crash ,, will we get a repeat ?

PRICE wise – bulls are still in control as they hold markets up, but they are getting weaker and weaker as we saw this week, with the worst days in the mkts this year. I think a correction is starting , dow jones ended red for the week, EUROPE already down a lot and we only need US to follow soon. Yen looks very much bottomed and as yen starts to rise , Japanese mkts will also fall down. I remain bearish even if I have done this for the past 1 month now. I’m long TZA from 12.2 and FAZ 13.5 if anyone wanted to know – all underwater currently, but I believe I will end up with major profits on those as soon we start to fall. REMEMBER MARKETS TAKES THE STAIRS HIGHER and ELEVATOR down , look at DAX lost all gains of 2013 in 1 day… enough said.

Enjoy weekend !

 

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