Dec 1

Weekend Outlook for 2nd December 2013 – A major high is probably in – be prepared!

Markets had another very quiet week grinding higher everyday on very low volume. As mentioned to members in chat when we broke 1750-1760 I mentioned new all time highs again to come – and with a potential target of 1810-1815. As we got to this level on Friday and nearly hit the 1815 target spot – we began to see some heavy selling on Friday into close – actually the “most” selling we had for past few weeks.

I look at that kind of selling as an impulsive move down and LIKELY a start of a major correction (or bear market).

As I’ve been mentioing past months I think we are close to a MAJOR high – I cant say if it will be a bull market high or just a correction high – so far you would think that everyone so bullish and we can never go down would suggest a bull market top , but I need to see the price/action on the coming move down in markets as I believe DOWNSIDE is coming.

1. As we hit my 1810-1815 target for members and started to sell off into close on Friday I believe this could very well be start of a correction.

2. VIX still looking bullish and I expect higher levels on VIX near term which means most likely a move lower on SPX to come.

3. Bearish divergences at resistances and everything overbought , even weekly chart SPX with RSI above 70 again , in past has many times led to a bigger correction.

4. Gold/Silver I remain very bullish on down here – I think the lows was made this summer 2013 and I think another uptrend rally began – looking for a move higher into 2014 and further into 2014 in both metals.

5. Statistics is usually bullish coming months , but this has so far been a wicked year — who knows if we get a santa surprise instead of santa rally like normal??

CONCLUSION: As long SPX above 1800 I think bulls still got it – if we break 1800 this week I believe MOST likely a major top has formed. If Friday was start of an impulsive wave down we should get more impulsive moves down. All in all – from current levels I think a large correction could be starting ANYTIME soon…. so I would not bet too much on the long side here.