THE OPEN

Markets open higher on the heels of short term oversold levels and rumors of a take out on a DJIA component. The DJIA is up 75, NAZ+13 and SPX +6.5.

Strongest sectors include metals, homies, gaming, oils, emerging markets, software, semis, airlines and tech. Weakest areas include reits, brokers and trannies.

Most of the key stocks I watch are higher with the exception of AAPL and MER.

Market internals are extremely strong with with winners beating losers on the NYSE by 1,200 and 900 on the NAZ.

The DJIA has 26 up and 4 down with AA MMM GM and HPQ leading and BA IBM JNJ and DD trailing.

The OEX has 80 out of 100 higher; NDX about 85 out of 100 higher; and over 400 of the 500 higher on the SPX.

Biggest winners include TEVA XMSR ADBE JOYG ALTR EXPE AA NSC GM ATI MMM and LTD.

Biggest losers include EXPD CHRW INFY MEDI VMED NTAP F BMY BA FDX and CPB.

The action in the brokers is a bit troublesome as the markets rarely go much higher without them. I suppose some of the sub prime jitters exist there but seem to me like it would be de minimus to their overall operations.

Volatility indexes have alreay dipped 5% and I suspect the sell signal comes in when the first VIX/VXO one reaches the 9.75 level.