Wow what a week and I must say that I have not expected the markets to keep being this strong , especially on Friday I were taken by a surprise seeing markets rally to 1600 plus on SPX and Dow Jones to hit 15.000 – a lot more than I have thought about and now many of the top patterns I have seen has been invalidated by the move up as we have not made a lower high , but a higher high on markets.

However I see some interesting things develop – especially if we look at VIX.

1. VIX looks still like forming a major bullish pattern and keeps making higher highs and higher lows. VIX hit the trendline more or less on Friday with the big rally in mkts – this suggest that fear levels probably bottomed out before another run higher. Again just look at VIX and see how well fear levels has been holding even with SPX and markets running higher.

2. Markets still got major bearish divergences and also on weekly chart formed a bearish RSI divergence – this suggest caution.

3. Markets above upper bollinger band suggest MORE THAN LIKELY that markets wont explode a lot higher near term – but usually more sideways move and probably a short term sell off due. Again nothing is 100% and this does not mean that markets will go down , we could still head higher before down.

4. Stocks above MA200 looks like forming a bearish pattern before sell off , if this is true expect a sell off.

5. They managed to get SPX above 1600 and Dow Jones above 15.000 – all round numbers ,, question is if this was the target in the big fishes mind?

Conclusion: I still got my shorts and right now underwater – to be honest did not expect the big move up on Friday – so my plan for my short ETFs is to give them ONLY THIS WEEK , cause if we dont sell off in this coming week Im going to take all shorts off the table. It is likely after such a big move up on Friday that markets might ahve a small move on Monday , but after Monday it is more likely that markets could sell off. Again I try to play the short term moves and not waiting for a bigger move.