VOLATILITY RETURNS

Just when it appeared safe to get back in the water - the markets turned from DJIA +300 or about 700 off yesterday's low- shouldn't be too surprising that the markets sold down and closed down 127 and lost another 100 in the futures after market.





Strong sectors - energy, gaming, brokers, internets and retail while emerging markets, banks and metals lagged.





NYSE- 360 net GREEEEEN;


NAZ- 335 net red;


NDX- 45 GREEN;


OEX- 40 GREEN;





WINNERS- SLE NOV EP WMB UNH ALL GOOG EXC NIHD WYNN MICC JNPR JOYG ATVI LINTA KFT HD MRK;





LOSERS- C CAT UTX BAC KO AIG RF WB FDX BHI SLB S HON CVS AAPL ISRG SIRI SNDK CHRW AMLN MCHP KLAC AMAT LOGI;





VIX- higher by 4% at near 70;





Crude- higher by 3% at 72;





Gold - a way down at $785;



VIX + MORE with his take on VIX and the TED.

Quant on VIX highs with SPX lows.

Is this the nail in the coffin.


So even Buffet couldn't keep the markets higher with his OPED in the NY Times- well it seemed a bit much too fast-





Next week - will be looking to buy the dips as am pretty confident that more money will be made on the longs than the shorts from these levels.

THE DULL

Its a relative snoozefest in the markets today as the wild swings appear to be yesterday's news.

Doubtful those wild swings are gone for good as I still have my 1500 point up day hanging out there some where.

Market internals relatively flat.

Strong sectors- oils, drugs, gaming, biotech and utils while metals, ags and banks lag.

Libor and Ted Spreads moving down - SLOWLY and if you are waiting for big moves lower before you invest - my guess is the markets will be lots higher when 3 month LIBOR gets to the 3.5%- number - today 4.42%.

A little food for thought- when George W. Bush took office, the SPX was near the 1365 level and the DRUG index was at/near 410 - SPX down about 31% in the almost 8 years while the DRUG index is down about 37% in the period. Not sure many folks would have bet on those numbers when he showed up in office and with a likely Obama win I will go with a reversion to the mean trade with a likely big up move over the next year regardless of who resides in the white house.

THE OPEN

Markets open lower but are well off the lows as the first dip appears to get bought.

Strong sectors- drugs, energy, biotech and brokers while ags, emerging markets and metals lag.

NYSE- 850 net losers;

NAZ- 575 net losers;

NDX- 35 GREEN;

OEX- 40 GREEN;

VIX- up 8% at 73.25;

Up volume about 2/3 of down;

Markets feel like they now want to move up on the bad news of the day - housing starts and consumer confidence- although still expecting wide volatility - but now feel like in the short term it should be bought- and keep a watch on the NAZ and GOOG for leadership.

DA MAN

Markets continue to fluctuate between green and red give or take 100 DJIA points and a big move higher or lower wouldn't surprise me or anyone else who watches these amazing screens all day.

Liking the RUT/NAZ/BIO leading and green so maybe a good sign.

Love that Cramer commercial where he call for the end of long term investing- just wish he would have mentioned it last Fall when the SPX was at/near 1575.

And would anyone be surprised by a 1,500/2,000 point move higher in the DJIA any time soon depending on when these hedge funds that are liquidating finish?

HISTORIC MOVES

Neither I nor anyone else can say if we are going higher from here but the RUT 2K and the NQ Futures have turned green and they led us back on Friday and Monday so lets see.

Bill with some bullish numbers and the Quant with a crash course.

THE OPEN

Not much to say besides the fact that the markets appear to be in melt down mode again as lots of folks are probably in forced liquidation state yet again.

All sectors red with the exception of EFA and FXI- worst ones include metals, ags, internets, banks and homies.

Market internals started green but have since flipped to red and show about 2,000 more net losers between NAZ/NYSE.

Keep an eye on the recent low at/near 840- if that gets taken out it could get lots worse as most folks seem to expect zero.

THE BAD

As ugly as it gets as the DJIA closes at the lows down 733 and the SPX down 90 to the 908 level. Horrid selling into the close as it seemed like liquidations galore were happening.

Next support are the 840 lows from last week and after that ZERO- which is ultimate support.

WHERE NOW?

Markets continue to trade lower with the DJIA hitting -390 SPX as low as -50 one thing to keep in mind is the retracement - last weeks low at about 840 and yesterday's high at/near 1045- so the 940 area may find lots of buying interest-

Strongest sectors- semis, biotech, drugs, metals and banks while oils, emerging markets and ags lag.

NYSE- 2375 net losers;

NAZ- 1550 net losers;

NDX/OEX- 20 GREEN;

VIX- higher by 8% at/near 60;

Down volume 10X the up;

Looking for an afternoon snap back as I suspect folks actually want to get long the market- RUT continues its ugly way and the NQ is leading in light of the ugly action in the oils/XOM.

THE HELPERS

Markets are lower this morning on the heels of weak economic news and weaker markets overseas. The DJIA -250, NAZ 36 and SPX 32.

Strong sectors include semis, biotechs and drugs while emerging markets, oils, homies and shipping lag.

NYSE- 2240 net losers;

NAZ- 1200 net losers;

NDX- 12 GREEN;

OEX- 5 GREEN;

VIX- higher by 6% at/near 59;

The NAZ/NDX is the strong area today and if you want a market neutral trade a long QLD/ TWM may be a pretty good as the RUT really lags and seems to have nothing.

Talking head on CNBC finally talking about recession fears as the markets are about 40% off their highs. Thank you.

Some excellent links at Bespoke and Barry while the really big news comes from London.

THE CLOSE

Markets came back into the the last hour of the day and it seemed like there was a bid under the market depsite the volatility.

Strong sectors inlcuded financials, shipping and metals while semis, real estate, gaming and tech lagged.

NYSE- 265 net green;

NAZ- 700 net red;

NDX- 9 GREEN;

OEX- 40 GREEN;

VIX-unchanged near 55.5;

OK - not much else to say except its volatile and fading the trend seems to be the way for now- yeah easy-

And any shot we saw some of this action last week?

Ooops Breaking News- another economic recovery plan from John McCain.

MORE SWOON

The swoon worsens as the DJIA is about 700 points off its best levels of the morning- just a bit shocking to see all this volatility in light of all the government help.

And for all the folks who bought this morning on the heels of the 950+ advance yesterday - ugh - and if you sold last week- please don't sell it when its down 800 and buy after its up 950- not a winning strategy.

No reason to try and trade this action- its just crazy - wait for it to settle in and I bet it will before too long.

NOON SWOON

Markets are clearly wacky and probably the most volatile ever. So I continue to be confused and will do little until they settle down a bit. Hopefully that will be before too long.

NYSE- 850 net winners;

NAZ- flat internals;

NDX- 30 GREEN;

OEX- 50 GREEN;

VIX- flat at 55;

Ten year note- 4.01%;

Up volume a bit better than down volume;

Crude - flat;

Gold +7 at $842;

Looks like a day to sit back and watch as both rallies and dips dissappear on a regular basis-

One trade that may be there is a long SPX/DJIA and short NAZ/NDX/RUT.

OPENING CONFUSION

The markets are way up again but seem to be rolling over quickly led by the NDX which is flat on the day while the NQ Futures are down 25 as there was a big difference between the 4 and 4:15 closing prices.

Strong sectors- banks, financials, telecom, shipping, brokers and oils while real estate, semis, internets and homies lag.

NYSE- 1750 net winner;

NAZ- 800 net winners;

NDX- 65REEN;

OEX- 80 GREEN;

VIX- down 5% at/near 52.25;

Up volume 7X down;

Originally I was looking for a temporary stopping point at /near the 1000 SPX level.

And after looking at the charts, the 1075 SPX level look like another temporary topping area as it is about the 50% retracement between the August 11 high at 1310 and the Oct 10 low near 840.

Problem is the action right now is not all that enticing with the big futures selloff in the first few moments of trading. Watching to see if I want more longs or going to start scaling into shorts.

THE CLOSE

Markets closed out their best day in about 75 years at/near the highs of the day which is pretty typical for a trend day. The SPX +104, DJIA +936 and the NAZ +195.

Strongest sectors- emerging markets, oils, brokers, shipping and ags while the laggards were banks, real estate and homies.

NYSE- 2865 net green;

NAZ- 2150 net green;

NDX- 99 GREEN;

OEX- 98 GREEN;

VIX- down 21% at/near 55;

Up volume almost 20x the down;

SPX moved back over 1,000 and my near term target has been met. Not going to make a big short bet tomorrow but will probably slowly sell my ETF longs. Didn't expect that today. And hiow many folks got scared out of stocks last week?

Funky action in GE and SHLD which both finished red- the action in GE is bizarre and one needs to keep it on the screens - is it possible that it could be another financial problem? Let us hope not.

AFTERNOON CLUE

Markets continue higher with the DJIA now +590 and the SPX +65 and probably moving back to the 1k level before too long.

Strong sectors inlcude - shipping, oils, emerging markets, ags and brokers while real estate, metals, banks and homies lag.

NYSE- 2720 net winners;

NAZ- 2000 net winners;

NDX- 99 GREEN;

OEX- 97 GREEN;

VIX- down 14% at/near 60;

Up volume 12X the down;

SPX continues up up and away but thinking 1k will be the near term top - 35 points above- so holding off on selling and shorting for those levels- hopefully later in the week.

THE OPEN

Markets are moving on up with the DJIA +440, SPX +49 and NAZ +90.

Strong sectors- ags, oils, shipping, brokers and emerging markets while real estate, metals and banks lag.

NYSE- 2560 net winners;

NAZ- 1860 net winners;

NDX- 97 GREEN;

OEX- 95 GREEN;

VIX- down 8% at/near 64.4;

Up volume 10x down;

Markets are moving on up and I suspect they will for a while - upside targets now at 9500/10000 for the next several days and maybe 12,000 before year end as we approach a seasonally strong time for the markets.

Looking to buy more SSO QLD UWM UYG- but in a bit-

THE BEAR

OK the futures are up between 4 and 5% as I type and foreign markets have put in a big up day so far. And lots of at/near the bottom calling in Barrons this weekend led by everyone's favorite bear Fred Hickey.

According to Barrons:

"Fred remains skeptical about the outlook for techs generally. He sees the sector as immediately vulnerable to a blizzard of lowered earnings estimates in the weeks ahead. And what impressed him most about IBM 's (IBM) third-quarter report, released last week and somehow overlooked by investors starved for a scrap of bullish fare, was that the company missed its revenue target by a bunch, not the most favorable of omens.

An old Boy Scout, Fred staunchly believes in being prepared. So he has drawn up a list of what to buy comes the post-capitulation rally. Since he's convinced we're heading into a deep and extended recession, his picks are restricted pretty much to companies boasting high cash flows, clean balance sheets and hefty gross margins.

Microsoft (MSFT) is at the top of his list if it can be snared in the low 20s (he bought a little last week). He considers EMC (EMC) attractive in the single digits, reckoning that demand for storage equipment will hold up even in a recession; its software business has been growing rapidly, and it owns most of VMware , No. 1 in virtualization. For that matter, he likes VMware (VMW) itself, plus a bunch of other software companies from Adobe Systems (ADBE), Sybase (SY) and Oracle (ORCL) to Lawson Software (LWSN) and JDA Software (JDAS).

He thinks Nokia (NOK) might be worth a look, thanks to its status as the leading mobile phone maker and the stock's 5% dividend.

And if you can buy Cisco Systems (CSCO) in the teens, you probably won't be sorry. Why, perhaps a tad giddy, Fred even suggested Apple (AAPL) in the 70s or low 80s might be worth a fling.

But mind, he's proposing these as stocks strictly for a rebound, if and when, but not to fall in love with."

Fred is usually as bearish as they come and usually is pretty good when he says buy - like MSFT now.