THE CLOSE

Markets closed the day near where they began as the DJIA was -14, NAZ -3 and SPX -5. The small caps out performed as the RUT was only down .17%.

Strongest sectors included drugs and biotechs with metals, airlines, oils, trannies and internets lagging.

Market internals flipped to red in the afternoon with almost 1,000 net losers on the NYSE and about 300 net losers on the NAZ.

The NDX had about an even number of winners and losers while the OEX had about twice as many losers as gainers.

The VIX was up almost 13% while the VXO about 7% and both trade over 20% above their respective 10 day SMA's.

The TRIN closed up at 1.28 and the three day in a row above 1.0 test has now been met. Also six out of seven days above 1.0 so over sold is now the word.

The numbers on the ADV/DEC lines also shows way over sold as does the 2 day RSI numbers now under 10 on most of the major market indexes.

A pretty big rally probably building near here as all the signals are finally in place.