CLOSING THOUGHTS

Markets close slightly higher on the heels of the stunning Democratic victories in yesterdays elections; and all the thoughts of oh my goodness the markets are going to get crushed fell by the wayside.

The other big news of the day, the Rummy resignation, also gave the markets a boost as market players figured the dems won't have Rummy to kick around anymore.

Sector winners included oils, oil service, internets, small caps, retail and financials. Lower were DRUGS, airlines, metals and brokers.

The OIH has hit the magic $140 level I have been yapping about for a while and I intend to trail it closely here anticipating another sell off and a buy lower.

Market internals were about 1,400 to the green after starting the day a very bearish 2,000 to the red.

Volatility indexes have sold down again to the mid 10 range and are again near their recent lows. They haven't been able to go lower than these levels and the markets haven't been able to go higher than these levels. Go figure.

The President was a statesman in his press conference and I admire him for doing the right thing. I anticipate that over the next several months he will start to bring the troops home from Iraq as it is the only viable solution.

If they would have brought in enough troops after the war was won in 2003 they could have fought off the insurgency (2020). However, in my opinion, Rummy refused to go the Colin Powell way with overwhelming force and we all suffered. The only way to beat the insurgency now is with another 200k/300k troops and that is not going to happen. The American people will not stand for the casualties. The only option, bring the troops home and leave the mess to the Iraqi people. The Kurds, Sunni and Shia have been fighting for many many years and they will not stop on our account.