AFTERNOON LOOK

Markets have sold off a bit in the early afternoon trade and many are attributing the action to a revisit of Friday's high (major resistance).

The SMH, which revisited the Friday high of $35 plus has backed off again as has the NAZ. The rule is generally that as the resistance area gets tested the more chance of a break through it.

Market internals have flipped back to flat with sector leaders being oils, metals, semis (positive but way off their highs) and trannies. Losing sectors include internets, retailers, biotechs and consumers.

The 10 year Bond is back over 4.81% and one of the characteristics of this market rally has been the drop in the 10 year to 4.75%. So if it backs up, it may be the catalyst for an equity sell off.

The list of DJIA winners has whittled down to twelve led by XOM, CAT, AA, C and HPQ.

Volatility indexes are about flat on the day but keep in mind that regardless of what you hear on bubblevision, the markets are very overbought with the 2 day RSI on QQQQ SPX DJIA etc all near the 97/98 mark.