PRE CLOSE

Markets have recouped about half their losses as I type and I have covered/sold my QID long position I put on earlier in the afternoon. Unfortuneately, I didn't short the gap open but did make dough on the move lower.

Strongest sectors - ags, materials, trannies, homies, industrials, metals and defense while retail, insurance, drugs, gaming semis, brokers and health care lag.

Key stocks- 10 out of 40 higher- leaders- POT MTW CAT KLAC MCD BG CME ISRG - losers- DECK MS WYNN MER GRMN UA GS TIF MGM AAPL LVS RIMM ICE;

NDX/OEX 30 winners each;

NYSE/NAZ internals not far from the flat line;

This is now a pretty pretty good day trading environment and I intend to get more aggressive next week. Remember, the primary trend is down so for now rallies will probably be sold and the QID is a very good vehicle for shorting.

One other thing, the OIH was being sold big time through Wednesday morning and then all of a sudden it has been on a tear and it is trading flat today with the DJIA -120. Just saying.