THE CLOSE

Markets closed near the flat line cept for the dopey DJIA which was up 73 on the heels of the big rebound in GM shares +1.5% and good for about 1 point on the industrial average.

Market internals were about 2/1 red on the NYSE and a bit better on the NAZ;

Down volume about 1.5X up on the NYSE;

TRIN- .77;

Drugs, defense, homies and trannies the best sectors with gaming, oil service, steel and metals the worst;

Interesting how with Obama seemingly increasing his lead per polls and intrade- the drug stocks are starting to get a bid- DRG +5% over the last month while the SPX is lower by about 7%;

Don't forget all the bulls who anticipated great stuff for drug stocks with a W administration- note the index is down about 25% during his 7.5 years in office; -

I am looking at mean reversion for stocks during the next administration regardless of who wins;

MORNING WHOOSH

Markets all over the board and this fish is trying to ignore the noise and focus on the weekend-

A close under the March lows would have me out of the recently discussed trades but I think they will hold and oil may be getting ready to fall as all the commodity stocks continue to get hammered.

Market internals weak but improving as the SPX has flipped to flat and the DJIA is +50- as the merry go around continues with the NQ futures about 20 off the lows.

Strong sectors include internets, drugs, retails, trannies and defense while gaming, ags, metals, steel and oils get torched.

VIX- a bit lower in front of the long weekend and it is above the SMA 10- as are most of the volatility indexes.

THE SHORTS

So here we go - 50% retracement from the morning high at SPX 1290 and yesterday's low at/near 1260- Yes 1275- so another interesting place to get long and if you want another variant view check Dougie Kass's latest-

Seem's like a lot of pretty smart folks looking for a bottom near these levels and I put out my thoughts yesterday on a current trade.

MORNING BLAHS

Markets open mixed after strong pre market futures were sold on the heels of a MER downgrade and news out of GM that they have sufficient liquidity through 2008-

Strong sectors include banks, internets, oils and telecom while coal, steel, metals and trannies lag.

NSYE- 250 net losers;

NAZ -550 net losers;

NDX- 30 GREEN;

OEX- 60 GREEN;

IBD- 25 GREEN;

VIX- flattish;

Up volume a bit better than down;

Larger than expected builds in gasoline and maybe the beginning of something good- crude trading higher by 45 cents so no big reaction to the news.

Markets having a tough time again as bad news continues to pour in- s0me other bloggers with bullish outlooks in the short term including the Quant and Barry.

LATE TRADE

Wacky day that will probably close near the unchanged level on all the major indexes except for the NDX which is up 21.

Strong sectors included metals, banks, biotech and defense while steel, gaming, airlines and trannies lagged.

Market internals much weaker than markets with 1300 net losers on the NYSE/NAZ.

Strategy for now- looks like 1260 on the SPX is a short /intermediate term low unless oil starts to rip higher - One idea for a trade is long SPY/DIA/QQQQ with a stop under the 1257 low from March- looks like a good risk to reward set up and one can scale into it.

And today's reversal higher looks pretty pretty familiar.

BESPOKE- with an update on the guru's and it looks pretty ugly for that group as most targets look pretty pretty unreachable by year end.

AFTERNOON RIDE

Here we go again on the daily roller coaster ride and right now not looking to pretty- although we are now well off the worst levels of the day.

Strongest sectors- metals, utils and biotech while airlines, steel and gaming are the worst.

NYSE- 1650 net losers;

NAZ - 1350 net losers;

Down volume 3X the up;

TRIN- 1.24;

VIX- higher by 6% at/near 25.3 and 10% above the SMA 10- so a it over bought at last;

SPX hit a low at near 1260 this morning and just a hair above the March lows at 1257- a triple bottom anyone-;

Stepping up and buying some QLD - slowly- and maybe some SPY/DIA before the day is over-

MORNING WATCH

A wacky day so far with the markets opening much lower and climbing their way back to the flat line and beyond into green territory. Bad news finally getting bought-

NYSE- 700 net losers;

NAZ- 640 net losers;

NDX -45 GREEN;

OEX- 50 GREEN;

IBD- 55 GREEN;

VIX- flat;

GOLD +17 at $945;

CRUDE- +$2.15 at $142.2;

Markets seem to have hit a temporary bottom as the SPX went near the 1265 level and about 8% below the SMA 50- pretty pretty stretched.

UGLY IS UGLY

Markets closed +3 on the DJIA, -22 on the NAZ and +1.6 on the SPX- not too good considering where we traded about 60 minutes before the bell-.

Strong sectors - telecom, utils, steel, oils and drugs while financials, homies, retail and internets lagged.

NYSE- 635 net losers;

NAZ 900 net losers;

NDX- 30 GREEN;

OEX- 50 GREEN;

IBD- 65 GREEN;

VIX- up .5 at 24;

Down volume almost 1.5X up at a heavy 1.6B traded;

For the first six months- not such a great year:

SPX -12.8%;

DJIA - 14.4%

NAZ -13.5%

NDX- 11.9%

RUT -10%

MID -4.6%

LARGE VALUE -15.5%

LARGE GROWTH -10.2%

SMALL VALUE -15%

SMALL GROWTH -5%

VIX +6.4%

OIH + 17.4%

XLE +11.5%

XBD- 29.8%

BKX -34.4%

DRG -14%

GOOG -24%

AAPL -15.3%

Its been an ugly six months - and the next six not looking so good as of now - but maybe we get some good news and a reversion to the mean.

One scenario- oil gets hit $15/20 in a day as demand destruction becomes apparent and the longs quickly flee - I don't think it is that far fetched - as many folks don't like the idea of burning up $4.5 every time they drive 18 miles - so don't be shocked.

AFTERNOON TRADE

Markets are trading mixed with the DJIA +53, NAZ -5 and SPX +8.

Strong sectors include steel, utils, telecom, oils, drugs and trannies while insurance, homies, financials, banks and semis lag.

NYSE- flat internals;

NAZ- 300 net losers;

NDX- OEX- each with 70 green;

VIX- flat;

TRIN- .85 - Up volume a bit better than down;

gold/crude - flatlining at $927 and $141;

Big caps doing better than the RUT/MID and the NAZ/NDX and that shouldn't surprise in light of the recent pounding the DJIA has take.

My take for now is we arent going much higher or lower for now and choppy trade will probably be the way. And any significant pop higher probably gets shorted - FWIW.

One area to buy if it "dips" the oil patch - as it seems to be in a nice consolidation and if oil drops a bit and the market does head hight my guess DIG goes along higher.

THE OPEN

Here we go again- markets tanking on the heels of weakness in the banks/financials and strength in the commodity patch as oil trades at $142+ and gold at $931.

Tough for the markets to rally with oil moving higher no matter how oversold the markets may be. And they are very over sold.

NYSE- 300 net losers;

NAZ - 200 net losers;

NDX- 25 GREEN;

OEX- 45 GREEN;

IBD- 75 GREEN;

VIX- higher by 3% at 24;

TRIN-1.00- Down volume about 150% up volume;

BKX down 2.5% 30 minutes into the session;

Its ugly and the morning lift lasted about 5 minutes before it all turned red- maybe a rally later in the day as the bulls try something before quarter end.