CLOSING RALLY

The DJIA/SPX big cap group closed near their highs with the DJIA +85, SPX +11 and NAZ +28. The biggest surprise of the day, the small caps which lagged all day and closed flat.

In addition, market internals made their highs when Big Ben let the cat out of the bag and worsened throughout the day. A closing green 1,100 on the NYSE and + 470 on the NAZ after having 1,700/1,000 more winners than losers earlier. A big difference.

The internals on the NDX/OEX/SPX were very strong all day and hardly varied from the green
95/85/400 all day. So the major indexes appear to be much stronger than the average stock.

Strongest sectors included semis, brokers, trannies, internets, semis, tech, emerging markets, software, biotech and metals; laggards were the dollar, reits, oils and small caps.

The 2 day RSI on the DJIA/SPX has hit the overbought areas at 90/87 respectively and may be giving the "take some off the table" signal.

Volatility indexes, like the market internals, hit their lows early and steadily drifted higher. The VXO hit 9.03, about 4 basis points off the near all time low of 8.99 before closing about 10% higher near the 10 level. The same pattern in the VIX but not quite as extreme as it also closed at near the high of the day.

I suspect a pullback from here on the Big Caps as 190 points on the DJIA and 22 on the SPX is going to be a pretty good reason for traders to take some money off the table. The traders that bought Friday and Monday anyway.