MIDDAY CHECK

Markets continue to trade higher although off their best levels of the day. The RUT continues to outperform, higher by 2.7% compared to +.88% on the SPX and +.54% on the DJIA; so when you hear all day about the big caps and the NAZ/NDX leading the way you will know the actual truth.

Strong sectors include gaming, brokers, homies, metals, real estate and small caps while software, drugs and defense lag.

Winners- BRCM JOYG CSCO FAST LVLT AKAM LEH MER ATI AXP EK PCLN ACH PCR TBSI ARD WNR STP FLIR AVT.

Losers- GTI CYNO SPSS WCG KCI SNHY RTN CBS CMCSA S T TYC SLE LAMR PETM IACI LINTA APOL SYMC GENZ CHKP.

Market internals - very bullish with 2,600 net gainers on the NYSE/NAZ while the NDX/OEX shows about 3/1 up downs.

Volatility indexes up about 7% and trading at sell signal areas and more than 10% below the 10 day SMA.

Tells look to be leaning to another rally this afternoon as all the right sectors are leading and the market internals look ubber bullish.

Keep in mind that we are at the 50% Fib retracement on the SPX/RUT- so selling may come in shortly.