So far markets played out fairly accurate from the last months where we catched most of the “bounce” up to 1415 , not all , but most of it. So far , looking at the longer term picture , both on US , but also on DAX, FTSE , TSX – all topped out in March where we hoped for a long term top to be in , before end of March. So far the highs has been holding in all indexes , only the US topped out in late March/April , but NYA topped out in March and followed the long term top so far.

So what is next?

Well – all charts pointing to a possible major crash underway ,, its coming imo and it will get truly ugly when its coming. However I believe that it WONT come here in May ,, but as we move into June and when the Facebook IPO is done ,, + LTRO done ,, then I think a major crash can occur , possible worse than seen before over past 2-3 years.

1. If you look at the long term picture on both NYA and SPX ,, they have imo topped out and both forming a very bearish divergence on the monthly charts ,, take a look at the monthly SPX chart giving a DEATH cross potential in June month – this is not seen over the past 50 years,,, + we have a very bearish divergence on monthly MACD.

2. Take a look at all European and Canadian market ,, all forming some VERY bearish patterns over the WEEKLY charts imo ,, which I think will start to play out ,, possible not in May ,, but moving into June it will only get worse and worse imo. I really think the EU zone could flare up again and some real pain might come , even some countries like Spain, Greece might see upheaval with angry people against the governments. It could be total chaos moving into this summer 2012 imo.

3. USD hit support trendline and so far bounced great from it ,, looking for a major USD rally underway which will be negative for the markets ,,, a major rally should come and I think over the past months USD has just consolidated for another big move higher.

4. Short term picture on SPX you see a potential topping HS pattern ,, if TRUE — the target would be 1290-1300 area — so this could be hit sometimes here in May month imo ,, then after a good bounce from that level, we should see a nasty type of crash move coming in June/July.

5. Remember we have Facebook IPO on 18th May ,, so somehow they MAY hold markets up higher into that date before they really begin to sell out.

6. VIX formed inverted hs pattern and got down to my target of 16 ,, and actually a little below – but however I still think VIX will see 28-30 based on the pattern I see in the near term ,,

For those of you who expect a crash just here and now , you might not get it imo ,, I dont think we will see the crash before the summer months , but imo June could be one of the worst months for this year and a potential major crash could very well occur by that time.

So all charts pointing to some real troubles coming by this summer ,, I believe it could be total chaos much worse than last year and past 3 yearsa and potential worse than 2008-2009… so get ready for it imo. Spain in big trouble and impossible to save imo ,, too big to bail and with possible French and Greek elections today could see some changes in the eurozone over next months…..

I dont expect any form of new QE3 , especially with the high oil prices impossible , as it would destroy the economy ,, they really need oil a lot lower before QE – who knows if a conflict could erupt in Middle East over the next months? But what I know is ,, something very ugly might come soon enough – so just be prepared for it.