SNOOZEFEST

A pretty dull day on the street with the NAZ/NDX out performing while the DJIA/SPX are trading near the flat lines.

Strength in HHH AAPL GOOG INTC MSFT RIMM and YHOO while steel, ags, real estate and homies lead and brokers, banks, gaming and telecom lag.

NYSE- 250 net winners;

NAZ-575 net winners;

NDX- 65 GREEN;

OEX- 50 GREEN;

VIX- down 3% at 22.7;

Up and down volume about equal;

Banks and brokers lower while tech acts well is the story of the day- but I still think we hit 1245 early next week to complet the 50% retracement from the 1290 level-

Otherwise - QUIET-

THE OPEN

Markets are trading higher by I am a bit skeptical of this rally and have bought some TWM expecting this to fade before too long.

Why the fade- well on the bottom of the strength list are brokers, banks, gaming, biotech and semis- so with them lagging - its gonna be tough.

NYSE- 400 net winners;

NAZ- 550 net winners;

NDX- 63 GREEN;

OEX- 45 GREEN;

VIX- down 2% at 23;

Down volume slightly ahead of up;

All the big banks and brokers with the exception of LM have flipped to red so just a heads up that this market could turn lower in a hurry.

Next area of support is the 50% retracement area at 1245- 1290 recent high and 1200 low tick from the big selloff last week.

THE CLOSE

A brutal day for the longs as stocks got crushed and the recent market run up is about half gone as the SPX fell from 1290 to 1253 after seeing a low of 1200 a few days ago.

Strongest sectors- internets gold and biotechs while homies, gaming, real estate, banks and brokers were crushed.

VIX- higher by 11% and back to 23.6;

Volume - fairly strong at 1.6B shares traded;

Looking for a bounce from the 50% retracement area near 1245 as I doubt we go straight down after going straight up- but 1260 definitely wasn't support as expected.

How helpful was Cramer with his watch C and XTO - ok watching - what is it exactly that we should looking for- C was crushed and XTO was a bit higher after being way down for weeks.

And again it was the recent losers that were the biggest winners and now the big losers yet again- NYX LVS WYNN MGM C BAC etc etc.

MORNING CRUSH

Markets are moving lower along with commodities for the first time in a while as the over bought levels are probably a little too compelling for the recent buyers.

The strongest sectors of late are the biggest losers- homies, real estate and gaming - while retail is very resilient so far in light of the AMZN numbers.

Not sure if its today's work - but first area of support - the 1260 level on the SPX-

THE OPEN

Markets are lower on the heels of over bought conditions in all the major indexes.

Strong sectors- internets, metals, oils and ags while homies, gaming, semis, real estate and reits lag.

NYSE- 700 net losers;

NAZ- 435 net losers;

NDX/OEX- 40 out of 200 green;

VIX and TRIN- rising -

Down volume almost 3X up;

Oil moving up - and Cramer now saying on his site that Nat Gas is heading straight for $7 and getting bearish on the whole complex- hmmmm;

If you check the action- the stocks that have been the strongest during this rally are getting hit the hardest- LVS WYNN MGM C MER etc-

And yet again the 38.2 retracement on the SPX at 1292 was at/near the high of this rally;

THE VOLATILITY

A pretty whippy session as suspected but nothing like the overall moves of the markets over the last few days- check these numbers:

XBD 41% off its all time high but 31% off its low of July 15;

BKX 44% off its all time high and 30%+ off its recent low;

LVS - comical 65% off its all time high and 71% off its recent low from July 15;

NYX - 56% off its all time high and 31% off the low from July 15;

XLE - 20% off its recent high from about 20 days ago-

OIH - hit all time high near $230 and down a meager 20% from early July;

SPX 300 points off its all time high from last October and 80 points or almost 7% higher than its July 15 low;

My suspicion is the markets will calm and volatility will revert to more normal level- this is pretty nutty;

THE WHIP

Markets were very strong early but have made a U TURN as the DJIA has turned red while the NAZ/SPX have faded to flat.

DJIA being led lower by WMT BA CAT C AA CVX IBM XOM DD -

FWIW - the 38.2 retracement on the SPX 1292- just about the high of the day - how's that computation - 1440 recent high on SPX and recent low at 1200- difference 240 X .382= 292.

GS a pretty good clue this AM that the market was a fade and keep an eye peeled on oil - which is now flat after being way down earlier.

Have the financials bottomed - all about the real estate- if that drops another 10% there will be lots more write offs for the financials- in fact- many of the financials will have to be written off- hopefully doesn't happen.

MORNING WHIP

Markets are mixed with the tech group doing better and the energy moving lower- seems like equities moving in lock step with crude which seems again to be heading lower.

Strong sectors- gaming, banks, internets, retail, telecom and homies while energy, metals, utils, trannies and brokers lead lower.

NYSE -500 net winners;

NAZ- 400 net winners;

NDX/OEX about 60% of components trading green;

VIX- flat at 21.25;

Up volume about 2X the down;

Not going to get too excited either way today as I expect the markets to oscillate with tech/NAZ leading and energy lagging-

Note the markets are way over bought short term - and how are the strategists looking at end of year forecasts now- kind of funny.

AFTERNOON SELL

Looks like market is breaking out on lower crude/commodities and the higher dollar.

Just sold some SSO/UWM as the markets started to rip higher and FWIW the VIX slipped to about 13% under the SMA 10 and the RSI (2) is at/near 90 on most major indexes except for the NAZ/NDX.

My suspicion is crude is not going down in a straight line and another sharp drop would surprise this fish- not putting on shorts (yet) but in the back of my mind-

Tech levels - resistance probably on SPX at/near the 1270 area and a hair under the $190 on GS during the prior rallies after that $200.

MIDDAY MARKETS

Markets are mixed as the DJIA is +33, NAZ -6 and the SPX +.4 - note the strength in the RUT as it is +1.25%;

Strong sectors- brokers, exchanges, trannies, banks, biotech and gaming while semis, energy, metals, steel and tech lag.

NYSE- 525 net winners;

NAZ- 600 net winners;

NDX- 55 GREEN;

OEX- 65 GREEN;

VIX- lower by 2.5% at 22.5;

Up volume 1.5X down;

CRUDE/NATTY GAS continues to get hammered as demand destruction and a hurricane miss rule the day;

Equities looking strong as crude gets crushed despite the fact Boone is long and expecting much higher prices- my guess -not today's business- and Dennis Kneale yapping about what a great long term business tech is- I guess he hasn't checked the tech charts over the last 10 years.

OPENING GAP

Markets are getting a reprieve as oil and other commodities are getting crushed - also check the brokers and the exchanges- GREEN- IAI LM MS RJF CME ICE NDAQ NYX JPM USB GS (flattish);

Trannies, biotech, utils, defense and retailers green while semis, energy, steel, tech, ags and emerging markets red;

NYSE- 500 net losers;

NAZ- flat internals;

OEX- 60 GREEN;

NDX- 50 GREEN;

DJIA 16 GREEN;

VIX- up 2% at 23.5;

Down volume 2X the down;

Crude causing the markets to shake off the bad news from WB AAPL SNDK AXP etc but if that worm turns and commodities reverse- it could get ugly for equities. SPX 1230 probably a good target on the low side while recent highs near 1260 may be the cap.

THE CLOSE

Markets continued the choppy trade and closed flat on the SPX primarily due to the oils and lower on the NAZ/NDX- also note the RUT/MID group were the best performers.

Strong sectors- oils, steel, ags, gaming, metals and biotech while brokers, retail, internets, drugs and trannies lagged.

NYSE- 900 net winners;

NAZ- 375 net winners;

NDX /OEX -40 green on each'

VIX- down 4% at/near 23 and at the 90% of SMA 10 line;

Volume- very light with up better than down;

Short term the markets are somewhat over bought with RSI (2) levels at/near the 80 level on most major indexes- and with the VIX taking the recent hit - more reason why the markets may find turnaround Tuesday tomorrow- lower as the next big bank - WB reports- lower quality and more risk.

And have the financials bottomed? My guess is the real question is whether real estate has bottomed- if R/E drops another 10/15% won't most of the banks/financials be insolvent due to leverage- ?

AFTERNOON TRADE

Markets continue to flop around near the unchanged line with strength in gaming, ags, steel, oils and biotech while brokers, retail, internets, trannies and drugs lag.

NYSE- 900 net winners;

NAZ- 360 net winners;

NDX- 45 GREEN;

OEX- 33 GREEN;

VIX- down 1.5% at 23.7;

Up volume a bit more than down;

GOLD- $962;

CRUDE- $131;

Not a lot to be said about this trading session as the markets are pretty directionless and I have no feel for the close.

Tomorrow- could be turnaround lower Tuesday as some lesser quality financials are due to report- also keep a close watch on crude as it looks like it may have put in a short term bottom near these levels - and that wont be helpful for equities.

THE OPEN

Markets open higher but are now well off their best levels-

Strongest sectors include gaming, financials, steel, ags, homies and emerging markets while internets, drugs, trannies, retail and defense lags.

NYSE- 750 net losers;

NAZ- 500 net losers;

NDX-45 GREEN;

OEX- 45 GREEN;

VIX- flat at 24;

TRIN- .84 with twice as much volume to the upside;

Crude up about a buck after being much higher earlier;

SPX 1290 the upside resistance area but still far far away- brokers are trading mixed and unless they stay green the markets could turn lower- a fill of the morning gap open should not surprise anyone.

PRE MARKETS

Futures are pointing higher again this morning as BAC has beat the lousy expectations- oil also trading up but off the best levels as storms look to hit the gulf of Mexico.

Since the markets have been bouncing the last few days form a low of 1200 to the 1260 level on Friday it may be worthwhile to actually look at how bad they have been since the recent highs:

SPX October 07 high to now -20%;

NDX November 07 (recent high) -19%

RUT July 07 -19%

MID July 07 - 14%

BKX Feb 07 - 43%

XBD June 07- 43%

MSH Oct 07 - 20%

RLX Feb 07 -35%

HGX July 05 -62%

BTK Oct 07 -6%

RMZ Feb 07 -33%

EEM Nov 07 - 22%

EFA Nov 07 - 21%

EWZ May 08 - 21%