THE CLOSE

Markets all over the board but closing red and giving back all of yesterdays gains. The DJIA closed down 150, NAZ -37 and SPX -19.

Rick Santelli, probably the best "analyst" on CNBC, explaining a new technical problem with the SPX, as it had an outside month in July but is closing at/near the low of the month and below the low of the prior month, perhaps indicating a trend change similar to what happened in March of 2003. Not sure I want to challenge Rick, but checking the monthly charts, the same thing happened in May of 2006 and February of 2007 and the uptrend continued as the SPX went on to make new all time highs.

Brokers crushed with GS BSC LEH MER all down big as folks seem to think AHM has major ramifications all over the space.

Tech was ugly all day led lower by AAPL AMZN BRCM CSCO GOOG IBM RIMM SNDK and TXN.

Retail also big red led lower by BBBY COH DECK KSS SHLD and TGT.

Oils were up big this AM but sold off in the afternoon with the rest of the market. Winners were APC CNQ DO FTO HOC SU while CVX NFX RIG VLO and XEC were red.

Market internals closed red after being very bullish earlier in the day. The NYSE/NAZ closed with about 1,200 net losers.

The NDX/OEX each had about 5 down to every 1 up.

The IBD 100 with better internals with 40 up and 60 down.

Volatility indexes up about 12% and back to buy signals on the major indexes.

Not to get too carried away on the Bull side, but markets are getting cheaper as the SPX probably trades near 15/16x earnings of 2007 and maybe 13/14X earnings of 2008 which will soon come into focus.

Also note the TNX with its rate down to 4.77%, so hopefully a flip from bonds to equities before to long by the asset alligators.