BACK ON MONDAY

THE CLOSE

Another ripping day for stocks as the all the major market indexes closed at/near their highs. The DJIA +1.3%, NAZ +1.6% SPX +1.5% RUT +2.8%. Who would have thought the small caps, without the international exposure would rip higher in early December?

Strong sectors- homies, oil service, brokers, real estate, small caps, metals and trannies.

Key stocks- 35 out of 40 green - Leaders- MER KLAC MA DECK ISRG MGM MS RIMM INTC LVS; Laggards- UA VMW TIF BIDU MO KO CELG ICE CME;

NYSE/NAZ internals- 3,100 net green;

NDX- 65 GREEN;

OEX-85 GREEN;

IBD 100-70 GREEN;

VIX- trading under 21 and about 14% under the 10 day SMA- generally not a good time to get long for a short term trade;

RSI (2):

SPX 91
DJIA 92
RUT 90
NAZ 89
MID 95

Technically, we shot through the resistance and are now above all the key 50 day SMA's. Next area to watch on the upside, probably near the 1,525 level on the SPX but I suspect some short term weakness first. Yeah, pretty wrong so far about these resistance levels- also I suspect lots of folks took the OIH dividend that was dumped into accounts today and reinvested the proceeds directly in the OIH. And for those looking for crude to fall back to $75 in a straight line, probably not as it closed up about $3 today. What a shock that the market and crude traded in the same direction.

MIDDAY

Markets are drifting higher into the middle of the day with the IWM RUT leading the way. The DJIA is higher by .42%, SPX +.48%, NAZ +.66% and RUT+1.6%.

Strong sectors- homies, oil service, metals, financials, reits and real estate- laggards- utils, retail, drugs and tech.

Key stocks- 30 out of 40 higher- leaders ISRG MA RIMM DECK MGM NYX KLAC- laggards- VMW UA BIDU TIF WYNN GRMN KO MO BG CELG;

Internals- very strong with 2,100 net winners on the NYSE +NAZ;

OEX- 65 WINNERS; NDX- 55 WINNERS; IBD 100-66 WINNERS;

Up volume 2.5X Down volume;

VIX - moving down and under 22 and trading more than 10% under the 10 day SMA;

RSI (2) at /near 85 on most major indexes:

MID- 92

SPX 85

DJIA 88

RUT 87

NAZ 84

NDX 84

Technically, definitely in overbought territory and at the 1,490/1500 resistance on the SPX. In addition, if you check the IWM chart above and $77.7 stands out as a big resistance.

Note- 50 day SMA's (downtrending) rapidly approaching - DJIA- 13,565, SPX -1,503 NDX-2,120.

As mentioned earlier, lots of sell signals here and now and I have sold part of my YM futures position.

THE SETUP

Markets are trading higher shrugging off the soggy sales news from TGT etc and are running right into major resistance on the SPX at the 1,490/1,500 area.

Strong sectors- homies, airlines, financials, small caps, oil service, trannies and real estate- lagging are retail, utils, drugs and large caps.

Key stocks- 25 out of 40 higher led by MA DECK POT ISRG AAPL KLAC GRMN AMAZN RIMM and GOOG while TIF BIDU UA BG GS KO MO NVDA lag.

NYSE- 975 net winners;

NAZ -840 net winners;

NDX -45 WINNERS;

OEX-60 WINNERS;

IBD 100- 70 WINNERS;

Winners- LIFC CF FSTR BUCY SSRX SNDA LRCX DISCA UAUA XLNX CEPH AIG RTN NSM IP WY NSC LEH JPM BNI;

Losers- TGT LTD BMY T VZ AES EXC WMT AEP LKQX MBT GSOL MR AIRM PAY FLIR RYAAY SHLD CTSH MNST ERIC PETM PDCO;

VIX- down 1% and trading 10% below the 10 day SMA;

Up volume 2X Down volume;

Technically, we are setting up for a fall as we run right into major SPX resistance, low oversold VIX readings and RSI (2) readings at near 80 on major indexes. Trailing some stops here and maybe taking off some YM futures.

DOWNGRADES

Futures are higher in the premarket as the European and Asian markets trade up. The Bank of England cut their key rates to 5.5%.

MS and GS both downgraded to Neutral from Buy at MER; seems like these stocks get hit with downgrades about every day. Hopefully lots of questions get answered on December 18 when GS has its earnings release.

Oil trading down another buck to $86.5 and gold down $10 to $790 area.

Technically, lots of resistance above at the 1,490/1,500 SPX area as this was the level we shot through on September 18, the first rate cut day. It has acted as resistance since November 7, when we lost over 40 points and I am looking for this rally to end near these levels in the short term. The 200 SMA is also here at 1,484 which we barely got through yesterday. Hopefully another push higher into year end to the 1,525 area.

MIDDAY MARKETS

Markets continue to trade higher led by the RUT/NDX group. Also, suprisingly, the MID's are now up more year to day than both the SPX and the DJIA. Who would have thought MIDCAPS with all the LARGE CAP blather on TV. Although market now selling off on MBIA capital shortfall news with the financials leading the way lower.

Strongest sectors- emerging markets, semis, real estate, tech, oils and homies while metals, airlines and internets lag.

Key stocks acting very well with NVDA ICE LVS POT INTC MSFT leading and MCD AMZN BG TIF DECK MS KO BAC lagging;

NYSE - 1,700 net winners;

NAZ- 1,250 net winners;

NDX- 85 GREEN;

OEX-90 GREEN;

IBD 100-85 GREEN;

IBD 20- 17 out of 20 green led by MOS FSLR POT GILD WFT CME AAPL;

VIX - now about 10% under the 10 day SMA and flashing sell;

Up volume about 4X Down volume;

And for the first time in a while, More New Highs then New Lows on the NYSE- 78/57- still red on the NAZ- 33/87;

Technically, the SPX just broke above the 200 SMA at 1,484, so curious to see if they can close above the line. Other numbers to watch, NDX 2,120 the high of the other day and the 50 SMA.

THE OPEN

Markets open higher led by the RUT and the NDX with the big cap DJIA/SPX lagging.

Strong sectors- emerging markets, oils, semis, oil service, insurance and real estate while metals internets and airlines lag.

Key stocks - 35 out of 40 higher led by NVDA RIMM INTC POT LVS CME and MSFT while AMZN MCD BG BAC KO GS lag.

NYSE - 1,700 net winners;

NAZ - 1,260 net winners;

NDX-85 GREEN;

OEX-82 GREEN;

IBD 100- 88 GREEN;

Winners- TELOZ VIP SSRX ARGN SID BCSI TKC WFR FSTR SDA ATW PCAR MXIM NVDA ORCL RIMM AIG INTC NSM CI SLB UTX EMC MSFT COP;

Losers- CMCSA NXY TWX DIS MCD BAC LTD AXP MER MDT LAYN CTRP IRIS BLK AMZN HRBN TEF XMSR SIRI DISCA AMZN LBTYA ATVI SPLS DISH YHOO;

VIX - 22.7 and down about 4.7% and trading about 9% under the 10 day SMA;

RSI (2) mainly near the 70 level;

Technically, SPX/DJIA both at/near the 50% retracement levels with lots of resistance above at the 1,490/1,500 area.

In addition the brokers have flipped to flat/red so not sure we will make much upward progress unless things in that sector change for the green.

GAPPER

Futures are ripping higher this morning on the heels of big job gains predicted by ADP and soaring foreign markets. YM +133, SPX +15 and NQ +27.

In the news:

MGM buying back 20,000, 000 or an additional 7% of the float;

C cuts estimates on GS LEH MER while keeping MS flat;

Weisel upgrades INTC to overweight from Equal;

Gapping up- RIMM VMW MER MGM INTC MA BIDU MS NVDA GRMN LVS GS GRMN; Down- CMCSA NXY MDT MNST XMSR ERTS CTSH TEF;

FWIW the latest IBD BIG CAP 20 includes:

POT VMW AAPL GOOG NYX PCP GLW DE FSLR MA BLK GILD CME AMZN GENZ MOS WFT EMR SYK ESRX;

THE CLOSE

Another down day for the bulls as the markets sell off on the heels of the big broker downgrades this AM from JPM. The DJIA closed down 66, NAZ -17 and SPX -10. Tough for the general market to get traction when the financials struggle.

Sector strength was found in metals, China, retail, internests and utils while real estate, brokers, homies and financials led the way lower.

Market internals were bad from the open as the NYSE closed with 940 net losers, NAZ with 925 net in the red while the NDX/OEX showed 30 green each. IBD 100 a bit better with 35 green.

Key stocks also mainly red with AMZN GRMN CME WYNN BG MGM and KO higher while GS MS RIMM MER MA UA CELG C GE and BAC closed lower.

Technically, I continue to look for downward action to SPX 1,450/ DJIA 13,150/NDX 2,025 as those areas will probably be a nice spot for a rally into resistance before year end.

LEVELING

Markets open lower on the heels of downgrades in the financial sector by JPM. the DJIA is -50, NAZ -15 and SPX -9.

Strongest sectors- metals, China, defense, semis, emerging markets and internets;

Weakest sectors- airlines, brokers, financials, banks, real estate and small caps;

NYSE - 1,420 net red;

NAZ- 1,050 net red;

NDX 15 WINNERS;

OEX -20 WINNERS;

IBD 100- 20 WINNERS;

Key stocks in the green -BIDU BG RIMM GOOG MO CELG CME POT MSFT AAPL;

Key stocks red- MS MER TIF GS C VMW BAC GE MA UA DECK GRMN;

VIX - near 24.5 and higher by 3.5%- still 3% under the 10 day SMA;

RSI (2) on various major indexes:

SPX 29

DJIA 32

NAZ 18

NDX 20

RUT 14

MID 27

Technically, the levels that stand out as support are 1,450 on the SPX and 13,165 on the DJIA (61.8 FIB), the 200 SMA on the DJIA also right here at 13,255. SPX 1,450 was a big level before the break on Nov 19, so I am watching it again as an important stopping point.

NDX -2.025 is the number yet again, the 50% retracement.

THE CLOSE

Markets didn't cooperate with my trading plan and I never entered a trade as one of my key tells of late was crummy all day - AUD/JPY currency trade. Usually it goes in the direction of the equity markets and today it never confirmed an upward bias. In addition, the internals on the OEX were very red all day so probably a good day to sit out.

Strong sectors- oil service, metals and utils while China, airlines, gaming biotech and brokers lagged.

IBD 100-60 WINNERS and the best of the groups I track for leadership- of course metals and energy led the way and those equities dominate the IBD 100.

VIX -closing up about 3.5% and still well below the 10 day SMA;

Up volume- about half the Down Volume on a light day of under 1.3B traded on the NYSE;

RSI (2) not giving any signals yet as most indexes are in the middle of their short term trading ranges:

SPX 55

DJIA 58

OEX 50

NDX 30

COMPQ 33

RUT 34

Technically, SPX closed a hair under recent support at the 50% retracement while the NDX closed at the weekly Pivot at/near 2,067.

So like most days, tomorrow will be important and turnaround Tuesday would not be surprising.

MIDDAY SNOOZE

Markets continue to bounce around with oils, metals, semis, utils and retail higher and gaming, insurance, financials and real estate lower.

Market internals continue to be strong on the IBD 100, weak on the OEX and flat on the NDX.

OIH continues to act well despite the slippage in crude.

Winning stocks- ATVI DSICA SHLD MCHP XMSR CMCSA MCD INTC DD CI TELOZ TISI AGU SXE CF FSTR GSOL;

LOSERS- PAY RIMM EXM DSX DRYS COF AXP GE GM EK DELL RIMM PDCO WYNN MNST AMAT CELG;

Not sure what is up with GE, but it certainly doesn't act well of late.

Anyhow, still looking for higher prices this week and maybe a little ramp into the late afternoon.

MORNING THOUGHTS

Markets opened mixed this AM with no real news driving the trade in either direction. The DJIA is FLAT, NAZ -1 and SPX -4.5.

Strong sectors include metals, silvers, internets, defense, semis and retail while China, real estate, reits, brokers and banks are lagging.

Key stocks mostly mixed with DECK POT BG TIF NVDA AMZN higher and RIMM WYNN GE GRMN LVS MER ICE NYX lower.

NYSE - 250 net red;

NAZ-370 net red;

NDX -50 WINNERS;

OEX-30 WINNERS;

IBD 100- 65 WINNERS;

VIX higher by 4% and about 5% under the 10 day SMA;

May be time to buy for a short term trade as the markets don't seem to want to go down ahead of the beginning of the money and an anticipated santa rally.

SPX at 1,490 remains an area of resistance and buying here into that number may be a pretty good trade.

NDX - also may have a trade from this point into the 50 day SMA at 2,120.

NOVEMBER PUNCHED

Barrons with some interesting stuff this weekend. First, Don Hays, very bullish based on the yield curve and the price/earnings ratio of the SPX over the next 12 months. Don is going with earnings of $103.19 for 2008 and a P/E ratio of 14.34. My take is the earnings probably come in a little light of $100 but still bullish for stocks as the PE will still be under 15 and with the 10 year Bond trading at a PE of 25 - stocks probably the way to go.

Hays also bullish on KO BUCY NVDA BGC and EMC.

Larry McMillan, a long time option maven and market technician sees problems for the SPX at 1,490, and suggests buying puts if the index traded up to 1,485. I have mentioned 1,490 as a major area of resistance but suspect we may power through it on some good news. That level was a recent area of support until we sliced through a few weeks ago.

Anyhow, November is punched and some surprising year to date stuff:

SPX +4.4%

DJIA +7.3%

OEX +4.8%

NAZ +10.2%

NDX +18.9%

RUT -2.5%

MID +7%

Large Value -FLAT

Large Growth +11.5%

Small Value -11.8%

Small Growth +12.2%

SMH -4%

HHH +16.6%

MSH +8.5%

XLK +12.9%

GOOG +50.5%

AAPL +115%

BKX -17.7%

XBD -12.6%

GS +13.7%

BAC -13.6%

C -40.2%

MER -35.6%

LM-19.7%

IAI -5.2%

XLE +25.3%

XTO +31.4%

MGM +50.8%

LVS +26.7%

WYNN+35.3%

HGX-40.4%

RLX -13.1%

TRAN +2.2%

HUI +20.1%

EFA+13.3%

EEM +35.2%

EWA +34.6%

Big Caps:

GE +2.9%

MO +18.2%

MSFT +12.5%

INTC +28.8%

Bottom line, value is lagging pretty far behind growth and small cap growth, the stocks supposedly without the "overseas sales" are beating large cap growth. I guess large cap financials are part of that under achievement although they may be more value than growth at this point.