THE GAP

Markets gap lower, way lower on the heels of some shrewd comments from MS regarding a coming 14% dip in European equity markets. Not sure what one is supposed to think if you recently bought equities through MS but I guess they have no problem with it.

Checking the stats on Wednesday gaps, the answer is 79% of gaps fill on that day. Not sure I would play it that way today but maybe we get half a gap fill.

Strong sectors include brokers with everything else pretty in red or pink. Others lower but out performing include internets, drugs, software, defense and financials; the worst groups are utilities, homies, trannies, real estate, airlines and small cap growth.

Market internals are very ugly with about 1,900 net losers on the NYSE and 1,500 net losers on the NAZ.

The NDX is out performing the NDX with about 15 in the green while the OEX has about 8 green.

The DJIA with 4 up and 26 down led by T VZ CAT and JNJ while AA IBM BA HD and MMM act worst.

The IBD 100 with 12 green including GES SRSL PCR X MTOX ATN MTW DECK AAPL VSEA ESI and HOC. Big IBD losers include TLVT IDSA DRYS ELP GSOL AKH and HDNG.

The 2 day RSI on the DJIA is 10, SPX 14, OEX 13 and NAZ 18.

Volatility indexes finally ramping higher (7%) as the VIX/VXO both about 8% above their 10 day SMA's.