TUG OF WAR

The markets have opened mixed with the sectors that have been the weakest of late, the strongest including GLD, OIH, XLE, HUI and GDX. In the non commodity group, best sectors are internets, biotechs and small caps. Worst groups are KSS, KLAC, airlines, GS, drugs, consumers, banks and retail.

Market internals are a bit bullish with about 500 more winners than losers on both NYSE and NAZ.

The banks and the brokers have led the recent rally and I am staying focused on them as they are currently red and appear to be getting redder.

I am also interested to see if this 1,350 line on the SPX is going to be resistance as many have mentioned. It would not be surprising although I bet the BUY THE DIP crowd is chomping at the bit to BUY.

On the DJIA, XOM CAT AA UTX MMM are leading while the telephone crowd is lagging along with perennial favorites GM and HPQ.