Uncertain outlook

BOTTOM LINE: While medium and long-term outlooks are firmly bearish risk/bullish USD, short-term risk could rally, with a new high for some index averages not at all out of the question.

The sell-off last week materialised as expected. As the market stands right now, I lean more towards a bounce. This bounce could be shallow and short-lived (corrective), but it could also be a building block for a fifth wave higher (of "c" wave of the second zig-zag). As always, the nature of the bounce will give clues to the market's intentions.

Given the medium and long-term bearish views, I would use any bounce as an opportunity to increase short exposure.