Equity Markets finally found resistance and started to correct the recent bull-run as riots in the middle east intensified and western countries had to aknowledge once again that they have been supporting corrupt regimes for too long. The canary in the coal mine remains Saudi Arabia, with a totaly corrupt family running the country for over half a century. For now, the Saudi Family has not been a target, but we should keep a close eye on the region as the situation remains far from stable.
The rise in Crude Oil has weakened the US-Dollar substantially during the past week, especially against the Swiss Franc, which has been the safe haven trade once again. As a result of that, the EURUSD tried to break above 1.38. I would have to close shorts if we trade above 1.3950. I will increase shorts if we break below 1.3440.
CBOE Volatility broke to the upside, leaving it's downtrend. This is something to watch closely. The VIX Index has strong resistance at 23 and a break above this level would be an indication that the correction become an 8 - 10 % drop.
My favorite sectors to short right now are the European Automobile Sector, as well as European Banks. I will post some sector charts later in the day.
I expect a rebound in equity markets this week, but the chances for a short term top are definitely increasing.
EURUSD: Helped by ECB comments and the rise in crude.
Crude Oil: The Momentum is telling me this move aint over
Gold: If we break above USD 1430, there is no top...
SPY:
Dow Jones Industrial
Eurostoxx50
SMI
DAX
