AFTERNOON SWOON?

Markets continue to trade higher although off their best levels of the day as the DJIA+40, NAZ+10 and SPX +3.

The 10 year interest rate seems to be crawling back to the unchanged level as it loses half its pre market gains and trades back to the 4.56% level.

Market internals have weakened considerably and now trade at +375 on NYSE and +430 on NAZ. The up to down volume is also getting closer to break even as there is 555 M shares up and 407 M shares down.

Buying big gap ups on Friday's is not my forte and a lower close today would not surprise me at all.

Strongest sectors include internets, brokers, homies, software, semis, airlines and financials. To the downside are metals, oils, gaming and AAPL LVS DNA and BAC.

HAPPY EXPIRATION

Markets open higher on the gap from the excellent CPI news but now trade off those highs as the NAZ Futures hit a high of +21 and now trade +11 and the SPX trades +3.5 after being about +7.

Strongest sectors are homies, biotechs, software, airlines, internets, retail and brokers. Lagging are metals, oils, drugs and utilities.

The semis opened higher but have since traded down and are now hardly in the green. I would pay close attention to them and the NAZ Futures as I expect them to lead any slippage.

Market internals are way down from their earlier highs with +600 on NYSE and +630 on NAZ. Keep in mind that the numbers are skewed green by the fixed income equities as the 10 year Bond has now dropped to 4.52%.

RIPPING AGAIN

This will be the only post of the day as I have some personal business for the day.

Apparently, the CPI numbers have come in bullish with Futures flying higher on the news with the DJIA Futures now trading +40, NDX Futures +21 and the SP Futures +6.

The 10 year Bond is also ripping on the news with the interest rate down 5 basis points to 4.54%.

The only thing I can offer is that markets are way extended and if you want to buy today, wait, as I suspect the opening buyers will get fleeced and the gap up will likely get at least half filled.

One other thing, LVLT, one of the three Jimmy Cramer speculative stock favorites is +9.8% since he recommended it back on October 27 while ARNA is down 12.1% and Q is down 11.3%, so hopefully LVLT was the only one anyone purchased. No doubt it will be the only one that gets mentioned.

THE CLOSING MATH

Listening to the genius of CNBC and at CNBC generally makes me want to pull my hair out ( and I have plenty) as they continue to get much of what they say exactly wrong. This afternoon Dylan et al were blabbing about the action in the financials and how they were leading the markets higher in light of the great earnings reports from the brokers.

Well, the sector leaders were RETAIL, SEMIS, TRANNIES, OILS, HOMIES and TECH. Brokers (XBD) were up .6% and the Banks (BKX) were up .64%. The IAI, which is an ETF of brokers with the biggest such as GS MER and MS getting the greatest weight, was up 12 cents or .22%. Thanks for the great information. I never thought I would anxiously await a product from FOX but I am curious as to what they will offer with their new financial network. If I could trade it I would short CNBC in size and go long FOX despite the fact that they are a wholly owned subsidiary of a political party.

Anyhow, the worst performing sectors were airlines, GOLD, SILVER, reits, utilities and biotechs.

Market internals closed with 900 more winners than losers on the NYSE and 530 more winners than losers on the NAZ. These numbers are way off the highs of +3,000 which occurred early this morning near the open and I suspect this does not bode well for tomorrow and we will see what we see for next week.

Also, check the NAZ Futures, they hit a high of 1,834 at 10:40 and closed the day at 1,824, also considerably off the highs as was the IWM which peaked earlier in the morning and closed up .5% back at $79.02.

The VIX/VXO tandem is giving out sell signals as both close under 10 and in excess of 10% below their respective 10 day SMA's. The 2 day RSI on the SPX/DJIA gives another sell signal with a reading of 96 and the QQQQ downtrend remains intact as the high from November 22 is still a bit away.

EVERY SALE IS WRONG

Markets are trading at the best levels of the day with new all time highs on the DJIA and new 6 year highs on the SPX.

Strong sectors abound with gaming, oils, tech, internets, retail, semis, software, trannies, homies and brokers all excelling. The only major sector to the downside is the airline group after ripping higher yesterday on the news of all the mergers.

Market internals continue at the same +2,000 level despite higher levels on the major indexes.


My early afternoon trade worked out well as I decide to buy the DJIA Futures on the heels of strong semis, strong internals, and a decent setup. I bought the 12,469 level and aimed for a gain of 15 to the 12485 level with a stop under the nearest pivot at 12450.

To say it worked out well is a bit of an understatement as I sold some at 12,485, some at 12,495 and the balance at 12,510.

Of course the DJIA could and did go higher, but I look at the job as making money not calling the bottom and the top. And who knows, maybe I get another chance to buy before the day ends.

MARKET MUSINGS

Markets continue higher at Noon but have made about zero progress since the first half hour. DJIA +61, NAZ +24 and SPX +9.4.

Sector winners include retail, semis, tech, NAZ, oils service, oils, trannies, gaming, internets, software and biotechs. Lower finds airlines, JPM and BAC.

Market internals have deteriorated considerably from the early euphoria and we now find about 1,900 more winners than losers compared to +3,000 earlier this AM.

On the DJIA, the winners are AXP HON HD DD WMT and JNJ while UTX JPM MMM BA and MO are lower; 25 up and 5 down.

The small cap index, RUT, also hit its highs earlier in the morning and has steadily sold off about one half %, so perhaps telling us something.

There is also lots of chatter about 1,425 capping this recent move on the SPX and with the VIX down in the mid 9 area and at new lows, it is probably prudent to take off some longs.

I don't expect much more upside into the end of the year as the name of the game for the PM's will probably be "gain preservation" and lets end the year here.

BINGO

Markets open way higher with the recently weak NAZ leading the way. In addition the $150 price target on the OIH has been hit in light of the OPEC decision this morning to cut production in February which sent crude higher. Glad I didn't sell it hard at $120 as Cramer instructed.

Strongest sectors include the recently weak semis, oil service, software, biotechs, retail, small caps, trannies, techs and gaming. Lower are airlines.

Note resistance today at DJIA 12,491, SPX 1424 and NDX 1,804.

Market internals are extremely strong with 3,000 more winners than losers.

The 10 year Bond is back to the 4.6% level.

One big heads up to the VIX and the VXO as both now trade in the mid 9 range with the VIX about 12.5% below its 10 day SMA.

GOOG AAPL and GS are all higher with GS back over the $200 level and GOOG struggling to get back to $485.

And my friends at minyanville.com are reporting that $5Billion of SPX Futures were bought minutes after the SPX made a fresh high.

And congrats to W as his approval ratings according to CNBC hits 34% and a disapproval rating of 61%.

TECHNICALS-DJIA

As one can plainly see from the chart, the DJIA has done very little over the past month even though it hit a new intra day high yesterday morning. The SPX has traded in a similar pattern while the NDX/NAZ have both been in mini downtrends over the past month. Also, check the action in the SMH semi group which hit its high of $36 back in mid October and has since slid about 6.5% to a close of $33.65, not something one hears much about from the bubblites on CNBC.

I have done a pretty good job day trading lately and my favorite trading vehicle has been the YM DJIA Futures contract. The YM trades in one point DJIA intervals with each point equivalent to $5 for each contract. The CBOT requires about $1,950 of margin for each YM contract so with 10 contracts one controls the equivalent of $617,000 for $19,500 of cash equity.

My methodology is based on my read of market direction/chop via the individual index charts, market internals and leading/lagging sectors. Entry and exit points are based on pivots, support and resistance on the charts of SPX IWM NDX YM ES NQ and DJIA.

THE CLOSE

In what could only be described as a huge snoozefest, the markets closed near the unchanged line this afternoon after the DJIA made a new high near the open.

The semis gapped higher at the open and sunk all day and closed near their low on downgrades.

GS and GOOG also traded red for most of the day and gave a clue that markets were going to have some problems holding on to the early morning gains.

Sector leaders were oil service, airlines, integrated oils, retail, internets, homies, software and financials. Downside leaders were gaming, semis, biotechs, brokers and metals.

Market internals were about as flat as they get with +100 on the NYSE and -20 on the NAZ.

Hopefully tomorrow's trade will not in anyway resemble today as it was one of the worst in a long while with a minimal range after the morning gap.

For what its worth, GS is approaching its 21 day SMA at the 198 area and may be a nice pick up for a short term trade back to the recent highs.

NOON TAKE

Not sure if it is time to declare victory yet, but the OIH has indeed traded up to 149.11 and is near the highs of the day as I type.

Major market indexes are trading mixed after roaring at the open on the heels of the retail sales news. The DJIA is +4, NAZ -4 and the SPX is +1.

Sector leaders include airlines, oil service, homies, integrated oils, utilities and retail. Leading lower are semis, drugs, bios, trannies and metals.

GS and GOOG are trading slightly red while AAPL is a bit higher.

The 10 year rate continues to trade over the 4.56% rate and if it falls back this afternoon it may give a bit of a bid to equities.

Market internals are flattish with about 325 more winners than losers after opening at the +2,000 area.

My take for the balance of the day is that equities will rally a bit before the close. I am long some DJIA Futures and looking to unload them near the morning highs.

THE FLEECE

Markets gapped higher at the open on the heels of a good retail sales number, but the indexes have since come in after the DJIA hit a new high.

The NAZ is espcecially troubling here as it again is lagging the SPX/DJIA combo. As I type, the QQQQ is flat after being up about 35 cents or 15 NQ points earlier.

Sector winners include airlines, and I am not sure who is looking to bet their life savings in that sector along with homies, internets, software, retail, tech and finanicials. To the downside are semis, metals, gaming and integrated oils.

My 3 big tells of GOOG GS and AAPL are all green with AAPL doing the best and GS trying to bounce off of the $200 level.

Market internals are strong with 1,000 more winners than losers on the NYSE and about 700 more winners than losers on the NAZ.

The 10 year rate bounced on the retail news and is now trading at 4.544%.

Oil patch numbers coming in at 10:30 and I still expect the OIH to trade up to the $150 level before year end.

BACK WEDNESDAY AM

Out this PM and tomorrow for some personal business. Back on Wednesday and keep those markets up please.Thanks.

THE OPEN

Markets open slightly higher with DJIA +17, NAZ+3 and SPX +2.

Sector winners include airlines, banks, metals, internets, software, trannies and gaming. Leading lower are biotechs, oils and drugs.

GOOG and AAPL are green while GS is lower by 50 cents in front of their earnings.

Market internals are a bit green with about 500 more winners than losers.

The 10 year Bond is back to 4.518% and I was just reading at minyanville.com where it was noted that Abby J. Cohen was the only strategist in Barrons this weekend to call for lower rates on the 10 year next year. Fade?

PRE MARKET

Markets are set to open slightly higher with the DJIA Futures +15/20 as I type. Some of the technicals that I see and have read about concern the divergences between the RSI and MACD momentum indicators and prices. If one looks closely one can see higher highs on the SPX and lower highs on the RSI and the MACD. I suspect it won't mean much as I expect the markets to rally a bit into the year end with both "performance anxiety" and "bonus preservation" being the main themes for portfolio managers.