BUY SIGNALS

Well that was an ugly reversal as the DJIA was up close to 100 early and closed down 85 and was still the best performing major market index (big caps of course).

Strongest sectors were wheat, corn, soybeans, biotechs, airlines and retail while metals, utilities, software, semis, oils, brokers, xchanges, real estate, tech, gaming and small caps acted the worst.

And what happened to the famous "the market are rallying on the heels of lower crude." Well not exactly as the SPX dropped 15 points while crude was lower by $1.37 or 2%. That is supposed to be good for equities. Sure.

Big cap winners included PDCO LRCX RIMM SEPR UAUA ESRX BA WMT EMC TGT and GOOG.

Big losers -AES EXC AEP ATI F ETR SLB INTC GM MMM NTAP MICC VMED JOYG ERTS and BRCM.

IBD 100 had 10 out of 100 in the green led by EML PCR RIMM CMG WCG GSOL and PTI while NGA EDU SYNL HDNG TWIN and BTJ were crushed.

Market internals turned ugly early and closed with about 3,700 more losers than winners on the NYSE and NAZ and the OEX closed with 3 down to every 1 up while the NDX was worse at 17 up and 83 down.

Volatility indexes a little consolation as the VIX traded up to 14.08 or 6.3% while the VXO was up 8% to 13.81.

Signals, ah yes, we have them - Buy signals- The SPX closed with a 2 day RSI under 7 while the DJIA had a reading under 8; and the QQQQ around 9. The rule of thumb is to buy (scale) when they get a reading under 10 and sell when they get above 70 or better yet, trail them.

Lots of talk about rising rates as the housing market may be recovering but not to be today as the 10 year Bond closed at 4.857% rate, a hair lower than yesterday.

The VIX/VXO signals have not hit as they trade about 5% above their respective SMA's. The rule of thumb is to buy when they trade 10% above their 10 day SMA's.

I am still long futures although did trim some stocks over the past few days. I guess I should have stuck with my original plan of sell into the tag at SPX 1,528 but so it goes.

Anyhow, the pullback is close to the SPX 21 day EMA and that area may find some buying interest over the next few days. Remember, buying pullbacks has worked very well over the last 4 years and I suspect it will be no different this time.