Another very interesting week with mkts still slowly bleeding down. This again tells us PRICE/ACTION is bearish currently and a correction has begun. I believe we wont break the highs 1851 in the very near term and instad we are going to see a larger correction down to 1700 SPX in the next weeks ahead.

1. Very short term technicals are very oversold and suggest a rebound is due. However MA100 on SPX is a MUST hold and if we break this I could see some panic selling going on,, until then I think we are likely to see a rebound to try to test the highs , but will fail before the next bigger sell off occurs.

2. VIX had a nice spike higher and holding up very well – we might not get too much of downside on VIX before it starts to spike higher again , looking very strong.

3. NYSI suggest that there is still a lot of downside to come on this correction , so be prepared. NYSI on a sell/short signal telling to be nimble.

4. Gold/silver one of the strongest sectors for January 2014 – it might tell us that 2014 will be a very good year for miners which I believe.

5. January Barometer tells us that 2014 might be a very bad year as you see on the taber from Almanac. This looks very dangerous and confirms my view that a bull market top could very well be in here 2014 before a bear market starting. However I’m not in the camp where the bull market ended at 1851 yet.

Conclusion: Very simlpe – all in all correction imho has started but short term technicals expect a bigger rebound on SPX before another sharp sell off…. if we break MA100 then it looks very bad for mkts and panic selling might then begin. I favour though a short term rebound first.