Apr 1

Weekend outlook for 2th April 2012

Markets in especially Asia and Europe were down a lot this week as most markets sold off hard. CAC down -6% lately with FTSE also a down a lot from the top mid March.

The only markets which has been held good so far is the US markets which is still near the highs.

SPX did this week test 1420 area which is a quite interesting spot.

1. SPX hitting trendline from 10 year chart channel down ,, major trendline from past many years
2. SPX hitting upper trendline in a channel up over past 3 years
3. COMPQ hitting 50% fib retracement from dotcom bubble this week + a trendline from past 10 years in a channel up higher
4. VIX hitting trendline from past 5 years and have a major bullish weekly divergence since early 2012.
5. FTSE (European markets and Asian markets) have already sold off ,, US has yet not sold off.
6. I still believe a 1-3 year top is forming here at those levels , I did not get the sell off and reversal to happend here in March which I expected. But many signs show that this is still a major top in markets for the coming years.
7. XIV looks like forming a topping head and shoulders pattern = good for UVXY, VXX next week
8. Insiders still selling heavy in the markets.
9. SPX remains on a SELL signal as long we hold below 1410 ,, I think if we break 1410 good chances of a push to 1420-1440 level ,, but all the charts suggest that its close to this area
10. SPX may have backtested this week the 2011 sell off trendline

Conclusion: All the charts is lining up that this is a major top we wont see again over the past many years , we might go to 1420-1440 in case SPX break out early this week above 1410 – but the major top should be in at this area and we should see new lows. I believe that the rally from 2009 March lows is done (that was a bull market since 2009 – 3 years) but over the next few years we should see new lows and possible below March 2009 lows.

Do your own DD about the markets. They for sure held markets up nicely into quarter end window dressings to dress their books. Many indexes in Europa Asia already showing weakness ,, US has still to follow those other markets down. By cycles we did not get the sell off I expected late March, so the next cycles showing big weakness first by Mid April 2012. The time from now until this summer 2012 should be horrible and you could see something you havent seen before over past 10 years imo , time will tell us but I think a 2012 crash is very imminent. Remember a crash dont just take 1 week or 1 month , but sometimes can last a year or two. So we are ahead of something similar to 2007-2009 period , imo this will just be worse than that. But all in all if we break 1410 on SPX early this week ,, good potential we are seeing 1420-1440 area ,, but if we cant break 1410 a possible sell off below 13.000 on Dow Jones and SPX 1385 coming which would CONFIRM the top is in from October lows and March 2009 lows.


 

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