GETTING OVERSOLD AGAIN?

The equity markets refuse to rally as the market internals continue to show about 2,600 more losers than winners. The oils and metals have both flipped to flat and the big losers on the day are the retailers, brokers, banks, homies and internets. The HHH, after rallying the last few days on the heels of EBAY and YHOO is up to its old tricks of trading lower.

The Volatility indexes have ripped higher as the three day weekend is now history. The VIX and VXO are both trading at about 4% or 5% above their respective 10 day SMA's, so maybe a rally is near.

Revshark on realmoney.com mentioned an interest in the SMH and I do note that it is kind of outperforming today as it does less worse than general tech. He says:

"I mentioned Friday that I was building a position in the Semiconductor HOLDRs (SMH:Amex). I continue to do so today. I'm maintaining a mental stop on a closing basis of around $33.50. I'll look to add more aggressively on a move over $34.50. The semiconductor group had an upgrade today, and I like the way it seems to be stabilizing now on lighter volume. "

I hope he is right as the mood of investors/traders is pretty gloomy. If the semi's can catch a bid, it will be a nice feather in the cap of the bulls.