It looks like this week was start of a beginning correction potential as markets ended the week lower, below some important support zones at 1640 level.

Markets were trading in a basic triangle pattern for past week and we broke out to downside , telling me that we might very well have made a major top at 1687 on SPX.

Does this mean we will just go straight down ? NO – there will always be some “bounces” and relief rallies in between and markets looks already now very much ready for a relief rally short term.

CONCLUSION:

I believe markets have topped out – both Nikkei made a long term top (Japan) + US also followed down this week confirming that a possible top is in the US too.

So we can expect a major correction in the summer months but very short term – expect a relief rally.

The main reason is NYMO is way too low and everytime we near these levels – we had some kind of rally , so expect the same to happend.

I remain long on stocks currently – but might very well go heavy short on the next relief rally in mkts.