CLOSING LOOK

The markets gave the longs and the shorts a bit of pain as dips were bought rallies sold and the only line that held was support on the SPX at the 1,417 area. The DJIA pivots were useless as were the lines on the YM. In addition, market internals started green, quickly flipped to red and flipped back to green in the late afternoon. A nice day to be somewhere else but at the screens.

The SMH flipped to green early and stayed there and was the best hint that the markets may flip. Other strong sectors were crude, silver, small caps, emerging markets, software, metals, utilities and tech while biotechs, internets, trannies, airlines, drugs and homies led lower.

Market internals closed with about 1,000 more winners than losers while the NDX/SPX/OES all had slightly more losers than winners.

The 10 year Bond closed at 4.88% and continues to give equity holders grief as alligators (asset allocators) may be flipping out of equities and into bonds.

GOOG ICE CME GS KLAC all closed green while MS MER and AAPL closed red.

Volatility indexes gave back early morning gains and all have closed in the red.

Strongest stocks included ATI F CAT KLAC SNDK VRSN CFC FII and SYK while CDWC AMGN EBAY JOYG HAL and BAX were ugly.

OUT

Since I am the decision maker on this blog, this will be the final post of the day as I don't expect much action and I need to visit the gym. And we are going to show those North Koreans by not shipping them Jet Skiis and IPODS? YIKES.

Back to the markets, the NAZ is being kept afloat to some degree by the SEMIS while the DJIA is lower on the heels of crummy action in T BA DD and DIS.

Strongest sectors are the semis, GOOG, silver, software, tech, oils, emerging markets and metals; biggest losers include biotech, trannies, gaming, drugs, homies, brokers and retail.

Market internals continue weak with the NDX showing 40 winners; the OEX with 35 and the SPX with about 200 up and 300 down.

A net of 300 losers on the NYSE with 250 net red on the NAZ.

Strongest stocks include FII SWK KLAC JNPR VRSN NIHD CAT and ATI while AMGN MEDI CDWC JOYG WFMI HAR and EMI are the weakest of the big caps.

Action in key stocks is mixed with GOOG ICE and KLAC green and GS MER MS and AAPL red.

Lower prices this afternoon would not be surprising as the internal action in the major market indexes will probably trump the "better /more neutral looking" action on the NYSE and NAZ internals.

MORNING LOOK

Markets open lower on the heels of rising rates (again) and actual fear as the VXO is up another 6% giving a buy signal as it trades above 110% of its 10 day SMA. The VIX hasn't hit the buy area yet but if one wants to get long/longer this may be a good place to dip in a toe.

Strongest sectors are semis (green by 1% in the face of ugly stuff), silver, oils, tech, software and emerging markets. Leading lower are biotech on the crummy news from AMGN, gaming, trannies, internets, homies, airlines, brokers and retail. Large cap growth/value also acting better than the small caps.


Market internals are ugly again with only 35 winners on the NDX; 170 winners on the SPX and
about 40 out of 100 winners on the OEX.

The DJIA has about 10 winners and 20 losers with CAT MSFT AA INTC and XOM acting best and T HON BA DD MCD and PFE acting worst.

Overall, about 500 net losers on the NYSE and 400 net red on the NAZ.

Finally, there have already been a number of high tick readings including one over 1,000, so maybe it is a buying opportunity yet.

UGLY END

Markets finished yesterday near the lows as it was one of the ugliest days in a long time for the bulls. Market internals had over 3,000 more losers than winners as the rate on the 10 year bond pushed steadily higher throughout the day to close near the 4.87% level.

The thoughts of rate cuts by the fed now seems to be a distant memory as the economy seems to be stronger than most anticipated. The question for investors is do they want a strong economy and steady/higher rates or a weaker economy with steady/lower rates.

Major indexes are a bit oversold on a short term basis and it has "paid" to buy pullbacks since the new bull market began in March of 2003.

The action in the volatility indexes was interesting yesterday as the VXO soared 19% to 10.79 and is now trading about 7% above its 10 day SMA and The VIX also jumpy up 13% and 6% above its 10 day SMA. So neither quite at their buy the markets overbought levels but if we get further slippage next week they probably get there (10% above the 10 day SMA).

HALF TIME

Markets are lower at mid day as interest rates continue to move higher (straight up) with the 10 year Bond trading near the 4.86% level after starting the day at the 4.8% level.

The DJIA is lower by 50, NAZ lower by 16 and SPX down by 8.

Strongest sectors continue to be internets and semis although way off their highs with emerging markets, homies, oils, brokers, trannies and biotech acting the worst.

Market internals are crummy all around with a red 1,250 on NYSE and red 950 on the NAZ.

Major indexes have about 30 green stocks on the OEX; 15 green on the NDX and 140 winners on the SPX.

The VXO has shot up about 10% to the 9.88 level and trades near/at its 10 day SMA while the VIX is all the way up to 10.5 also near its 10 day SMA.

I don't think we get much of a bounce today as market internals and leading sectors such as brokers act poorly. The markets are hardly in oversold areas and I am waiting for lower prices to add positions.

OPENING MARKETS

Markets open mostly lower with the DJIA -14, NAZ +2, and SPX -2.

Strongest sectors are tech, semis, internets, metals, software and large growth. Weakest are oils, emerging markets, trannies, biotech, drugs, homies, airlines and midcaps.

Market internals are weak with about 1,250 more shares lower than higher with a negative skew to the NYSE.

Internals on the indexes show about 175/325 up to down on SPX; 35/65 on NDX and 38/62 on the OEX.

Key stocks are mixed with AAPL ICE KLAC SMH higher; GS MER MS IAI IWM all lower and GOOG mixed.

Winners overall include NSM TXN F EBAY BRCM SUNW NUE and LM. Losers include LSI BMS BTU ROH BIIB MEDI and FISV.

The rate on the 10 year Bond continues to creep higher now approaching the 4.85% level.

For the daytraders, pivots on the YM are 12,640 12,695 and 12,607.

PRE MARKET FUN

Futures are trading mixed this morning with the NAZ up a bit and the DJIA/SPX down a bit.

Gapping up are EBAY ASIA NFLX EPAY NAPS NOK EOP CDE LM and QCOM while PLXS VAR DGX FFIV GFI KOMG LSI and IMCL are gapping down.

Some interesting year to date numbers:

SPX +1.5%

NDX +2.6%

DJIA +1.3%

RUT +.8%

SMH FLAT

HHH +5.8%

AMGN +10%

SOX -2%

VLO +4.6%

OIH -2.4%

GOOG +9%

GS +10.6%

ICE +26.4%

INTC +2.9%

IAI +7%

DRG +4.4%

SSRI +6.3%

PAAS +10%

MGM +26%

HGX 4%

MID +2.8%

Small Value -2.6%

Small Growth +2.5%

Large Value +1%

Large Growth +2.2%

Trannies +5.7%

NEW DJIA HIGH

Markets closed at their highs as strong market internals/brokers/tech/ NAZ gave the game away early. The DJIA closed up 88, NAZ +35 and SPX +12.

Strongest sectors were tech, semis, internets, gaming, brokers, metals, small caps, homies and drugs while airlines and software lagged.

Market index internals were extremely strong all day with the NDX showing 90 up and 10 down, SPX - 400 higher - 100 lower and OEX 80 higher and 20 lower. Overall, 1,300 net gainers on the NYSE and 1,000 net green on the NAZ.

Big winners included YHOO T GM ATI GOOG GS SUNW CTXS GLW and EBAY. Bottom of the barrel included AMD PTV NSC SIRI XMSR ROK and MCD.

The DJIA is now at an overbought 2 day RSI of 84 and the VXO is oversold trading under 90% of its 10 day SMA. Traders will probably want to wait for a dip, but as has been clear for quite a while, buying dips or holding longs has been the winning trade.

Final note on Cramer, what is bothersome is that he comes on TV every few days with a different market opinion and pretends like it was always his opinion. It just make good anchors like Erin etc. look silly as they play along.

JOKE ON US

Everyone's favorite stock picker, Jimmy Cramer just on CNBC screaming at how great this tape is and how folks should buy MRVL and BRCM. Just wondering if he heard that other guy the other day, also named Jimmy Cramer, screaming that tech can't be owned until the summer, except for CSCO MSFT GOOG and AAPL. Don't look now, but of course tech is the best performer today. He was also screaming about how great LVLT is acting without mentioning his other top spec picks of October 2006, ARNA and Q . Who could possibly believe it?

TRADING DUCKS

Markets continue to trade higher into the noon hour with the NAZ and tech the star performers.

The DJIA is +44, NAZ +27 and SPX +6.

Strongest sectors are tech, semis, internets, brokers, retail, drugs homies and large growth. Weakest are oils and metals.

Lots of strength today in the internals as the NDX has about 90 winners and 10 losers, OEX more than 65 winners and the SPX with about 335 up and 165 down. Overall the NYSE has 700 net gainers and the NAZ has about 750 net winners.

Noteable winners include SUNW CTXS YHOO GLW ADBE EBAY NVDA GOOG and CSCO. Biggest losers include SIRI XMSR ROK NSC MCD XOM PTEN and GD.

In light of the strength in the NAZ, brokers, semis and the market index internals, it may be one of those days to make a bigger bet than usual. Remember also, the DJIA is about 30 points from another new high and I don't believe there is much of a question that it will be taken out before long.

OPENING LOOK

Markets open higher led by the NAZ as YHOO gives folks an excuse to buy the markets. The question in my book is will the NAZ rally be sold and the prevailing lousy NAZ trend take hold.

Strongest sectors include internets, brokers, techs, semis, gaming and biotechs. Leading lower are metals, oils, trannies and airlines. Large cap growth is leading while GS and long time favorite SSRI have made new 52 week highs.

GOOG is up about $10, GS +$3.4, while AAPL MS MER IAI KLAC are all solidly green.

The NDX internals are solidly green with 80 higher and 20 lower, while the OEX shows about 65 green to 35 red and the big SPX 500 has about 300 up to 200 down.

The key today looks to be the NAZ, if that can hang in the markets probably have higher prices in front.

BULL MARKET

Markets are set to open higher on the heels of the perceived good news from YHOO SUNW CTXS JBLU GLW etc.

Futures are up 20 on the DJIA, 2.25 on SPX and 10 on the tech heavy NDX. Is it the NAZ's turn to outperform for a few hours/days?

The chart above depicts the recent price action in the DJIA and if the markets open as anticipated, the index will be about 40 points below its all time high and about 500 points above the recent November lows near 12,075. The Monday lows will also be about 100 points in the rear view mirror based on the futures quote, so my guess is new highs again before too long for the one important reason that demand outstrips supply for equities. I believe anyone who sits in front of the screens all day everyday notices the same and probably should not try to outhink it. Dips are to be bought until the trading gods prove otherwise.


In the news, B of A reaffirming buys on refiners VLO and SUN; gapping lower are AMD DSX QLGC SAP STLD CAL ALU ATI STM AUY and NVLS; EMC downgraded at RBC; MER raises the target on MO to $98 from $92.

CLOSING THOUGHTS

Markets closed the day higher on the heels of strong prices in the oil patch as President W supposedly announces a large injection to the SPR.

Even with the rise in oil equities, small caps were the star of the day as the IWM/RUT rose about 1% with growth leading value.

Strongest sectors were oils, metals, gaming, defense, homies, emerging markets and software. Leading lower were airlines, biotech, brokers, internets and drugs.

Overall internals were strong with +1,000 on the NYSE and +550 on the NAZ.

The NDX had about one winner for every loser while the big cap OEX had 65 up to 35 down while the SPX showed about 340 up and 160 down.

Biggest winners were CTXS TIN RHI RIMM SLB and TXN while PFE F CKFR KLAC AMD and GPS led lower.

The IWM/RUT was the best performing major index and has traded to the 50 day SMA, although it seems to be in more of an oscillation mode than a trender so it may be a sell.

Tech earnings are probably the word to describe them is underwhelming and the tech indexes
are suddenly underperforming. My suspicion is once earnings season is over the tech stocks will again lead the markets higher. I hear the PM's now - "tech stocks have underperformed and are cheap again"- Don't know if they are cheap, but bottom line from watching the markets, there is demand for equites and that will take em all higher.

GONE FISHING

Well not exactly just out for some personal business. Will be back at the trading turret tomorrow.

MARKET CLOSE

Markets close with a small bounce off the bottom as the DJIA closed down 88, NAZ down 20 and SPX down 7.5.

Strongest sectors included brokers as GS closed up $2.6; MER+$.61 and MS +$1.8 while the banks also acted well with JPM BAC and C all closing green. Bottom sectors included tech, semis, airlines, trannies, metals, small caps and retail.

Large cap growth is starting to act crummy again as large value was the best performing of the big 4 while small growth was second and small value third.

Internals on the major indexes didn't change much from the morning lows as the SPX had 130 winners; NDX 15 and OEX with about 30. Overall internals were weak but did show some midday improvement as the close had about 1,800 net red compared with over 2,000 net red earlier in the day.

Closing 2 day RSI's on the NDX was 8; SPX 22 and DJIA 5 as some volatility has returned the markets.

VXO/VIX combo closed higher but hardly in a buyable area as they still trade below their respective 10 day SMA's.

DA BEARS

The bears are getting some respect on the street as the DJIA is lower by 105, NAZ -24 and SPX lower by 9.

Strongest sectors include silver, banks, biotech, oils, and gaming while airlines, GOOG, AAPL, tech, semis, software, trannies, internets and small caps.

Interesting individual stuff as MS is up more than 1% while GS and MER are flattish and some of the Banks including JPM BAC and C are green.

OEX internals haven't budged at the 30 up 70 down reading while the NDX remains with 15 up and 85 down. The SPX also hasn't budged from the first hour with 125 up and 375 down.

I have covered some more shorts here as turnaround Tuesday would not surprise me.

Biggest large cap winners include AMGN APOL GM RHI ISRG INFY while losers include ETN MOT NAV XMSR ATVI DELL AAPL BA and CAT.

The DJIA is acting pretty ugly and the 2 day RSI is probably at a buyable 4 while the NDX, which has slipped under its 50 day SMA is at reading of 7.

OPENING CRUSHING

Markets open significantly lower with the DJIA and NAZ fairing the worst as strong oils keep the SPX as the best of the bad. The NDX/QQQQ is trading a bit below the 50 day SMA FWIW.

Strongest sectors are oils, metals, gaming and financials while the worst include tech, semis, airlines, small caps, retail, software and biotech.

NDX internals are very week with about 15 gainers; SPX has about 130 gainers and the OEX has about 28 winners. So ugly on all the major index internals while overall the NYSE numbers are -900 and -1,150 on the NAZ. Down volume is beating up volume by a not so terrible 2:1 and the TRIN is hanging in at a reading of 1.00.

I mentioned on Friday that the range was very narrow last week and volatility may increase as low vols beget high vols. Well the DJIA has dropped 90 points in about an hour; about the entire range of last week.

Key stocks showing red with GOOG-5.6, AAPL -2.2, GS FLAT, MS +.36, ICE -2 and SMH down 1%.

The old adage of down openings in bull markets are to be bought may be in order as may the "markets that are weak all day tend to close at/near their lows" so take your pick.

MORNING LINES

NDX futures trading up 5.5, SPX +1.5 and DJIA flat on a BA downgrade and crude/oils higher on colder weather and snow in the midwest/ northeast.

On the wires we have GS with 6 reasons to overweight energy- 1) demand will exceed supply, 2) geopolitical risk to supply, 3) fastest dividend growth in SPX sector, 4) mutual fund flow, 5) attractive valuation and 6) sector offers best upside to firm's target prices.

WR Hambrecht sees short term trading opportunity with SNDK and reiterates BUY with a $55 target.

PRU raises GOOG revenue and EPS estimates and expects a strong quarter from YHOO.

CIBC raises target on NWS to $28 and reiterates it as one of two top large cap picks for 2007.

UBS expects a weaker than expected quarter at DELL and cuts estimates to .28 from .30 and cuts target price from $27 to $26.

BSC raises target on AMGN TO $83 and the stock is gapping up 2.4%.

And C is gapping up fifty cents as the search begins to replace Sally as CFO.

THE KRYING

I admit I have not followed KRY or Cramer much lately but if there is amusement to be had I am on it; Well low and behold a few folks like Bill Cara have posted about a Cramer flip flop on KRY as he now sees some political risk. The realmoney.com site on January 16, 2007 noted this about KRY and Jimmy:

"Crystallex (KRY) : "I have walked away from Crystallex and endorsed Yamana (AUY) ." Cramer said he has done so because President Hugo Chavez of Venezuela, where Crystallex does its gold mining, "has proven to be a recalcitrant, pseudo-Communist."

Back in April of 2006, I wrote the following from information in the companies SEC filings:

The company identifies the following as a country risk- The companies principal properties are located in Venezuela and as such the Company may be affected by political or economic instabilities. The risks associated with carrying on business in Venezuela include, but are not limited to civil unrest, terrorism, military repression, extreme fluctuations in currency exchange rates and high rates of inflation.

When Jimmy first began discussing the equity, it traded between 4 and 6 as "the crowd" rushed in to buy. Those prices have not reappeared and now the crowd apparently wants to exit and prices are a bit lower, say 50% lower. I just don't get it; when there are so many other precious metal equities available; to pick this one, just a terrible disservice.

In addition, I suggest that anyone who hasn't read the CXO Advisory site's critique of Jimmy's money making ability titled "Cramer offers you his protection" to check it out pronto.