THE HINT

The markets are lower in the afternoon trade after a strong morning for the NAZ which has now also turned red. The biggest clue that the markets would have trouble today was the action in brokers and the semis. Both the SMH and GS/MER/IAI group have been red all day and the move has accelerated into the afternoon.

The DJIA has been weak on a relative basis yesterday and today due to the crummy action in the three drug stocks, JNJ MRK and PFE on the heels of the Dem victory in the House and Senate. Regardless of the constant hedging and hawing on Bubblevision, its true and its over, the Dems control both Houses of Congress.

Sector winners this afternoon are Metals, oils, some tech and internets. Leading lower are drugs, biotechs, airlines, brokers and small caps.

Market internals show about 1,200 more losers than winners with a NYSE over NAZ bias, which is completely different than the bias among the major market indexes, NAZ over SPX.

The VXO has jumped all the way to 10.9 (4%) on this slight selloff but nothing to get excited about.

The XLE/OIH tandem has moved to recent highs but has pulled back a bit. I suspect a little pullback in oil and oil stocks and then higher prices later in the month on the heels of colder weather in the northeast.