THE OPEN

Markets are down but off their best and worst levels- DJIA -81, NAZ -14 and SPX -10. Ugly numbers on ARM Prime loans seems to have given the markets another reason to sell off- as the delinquent number is now 6.75% - but as the one and only Dennis Kneale will tell us - over 93% are still paying timely. WAHOO.

Strongest sectors- metals, airlines, defense and drugs while homies, utils, shipping, retail and ags lag.

NYSE- 1540 net losers;

NAZ- 835 net losers;

NDX- 30 GREEN;

OEX- 20 GREEN;

IBD- 12 GREEN;

VIX flat at a little above the 24 level- fear hardly as this indicator is up 1.5 points on the year while the SPX is down about 18%.

Down volume 3X the up;

Looks like the rally I anticipated was short lived and the next area of support is 1200 on the SPX - the July 15 low. For now just sitting as far as day trading - waiting-

Note the area I want to buy is the 1170 area should we get there as it is the the 50% FIB retrace between the 1575 October 2007 high and the 770 October 2002 low.