MIDDAY LOOK

Markets are gathering steam to the upside as DJIA 8,000 holds yet again- (for now)- we were down about 130 and now only down 50 on strength in energy and financials.

Strongest sectors- internets, metals, financials, real estate and biotech while gaming, shipping, homies, tech and utils lag.

NYSE- 600 net losers;

NAZ- 200 net losers;

NDX- 25 GREEN;

OEX- 33 GREEN;

VIX- flat at 43;

Down volume about 50% more than up;

TRIN- 1.04;

GOLD continues to move my way now near $930;

Tried some shorts earlier but was stopped out and now waiting to what the PM trade may bring. Not comfortable shorting when energy and financials lead- so that is probably a good hint.

THE OPEN

Markets opened higher and have quickly flipped to red. The DJIA -40, NAZ -5 and SPX -4.

Strong sectors- internets, banks, biotech, energy and corp bonds while gaming, homies, shipping and real estate lags.

NYSE- 300 net losers;

NAZ- flat;

OEX- 30 GREEN;

NDX- 35 GREEN;

VIX- up barely at 43;

Down volume about 2x the up and the TRIN - 1.49;

Gold near $920 and Crude a hair over $42 dollar up and euro down;

Feels like a choppy day after two trendy days yesterday and the day before- and DJIA 8000 only 100 points or so below - and that has been pretty good support.

PRE MARKETS

Pre market futures have turned positive on the heels of a better than expected -3.8% GDP number v an expected -5.5% GDP.

Gold moving on up again this morning as it now trades over $920 and how long before it is back at the $1k level?

Dick Arms with some observations on the equity markets and not sure I agree:

"One has to be impressed by the way the market held yesterday. Pummeled again by a myriad of negatives, the pullback only erased the gain of the prior day. This is far different from what we would have seen a couple of months ago, and it suggests we are in a different market now. It still is having a great deal of difficulty in putting together any sort of lasting advance, but it is far less vulnerable on the downside.

Another positive is the way in which volume is coming in. It has been heavier on up days than on down days, suggesting some accumulation is going on, albeit quietly. There is no big rush to buy, but neither is there an indiscriminate dumping. The current series of days continues to give us the appearance of the right shoulder of an inverse head-and-shoulders. That implies we are soon going to be moving higher."

I think there is still lots of resistance overhead starting with Wednesday's highs which will be a major sell area should we get back to those levels any time soon.

BIG telling us energy good financials - not so good;

THE LUSTER

Markets continue to trade lower led down by shipping, homies, gaming and banks while metals, utils and corporate bonds act best.

NYSE- 1850 net losers;

NAZ- 1235 net losers;

VIX- higher by 6.5% and way below the SMA 10;

TRIN- 1.37;

Interesting move in GOLD as it moves higher while the DOLLAR Index is higher by .6% and the EURO is down by 1.6% against the $USD.

So buying more gold as that trade looks to have a lot of luster on it for now.

THE GARTMAN

Winners- SYMC AMLN APOL BIDU CEPH VRTX MMM KO PG CL AEP MO COV;

Losers- ALL RF COF BAC QCOM NYX LRCX STLD QCOM WYNN CTXS JNPR C BA AA GE AXP;

Was reading Gartman earlier today and he is playing the markets in an interesting way - hedging everywhere of course-

He is long EWC EWA EWZ and short EWG EWQ and SPY against those longs.

He is also long GOLD, MON, banks and infrastructure stocks and is long (short) SDS.

THE OPEN

After several days of promising news, markets are lower this morning with the DJIA -125, NAZ -30 and SPX -18.

Strong sectors- utils, bonds, biotech, internets and drugs while banks, shipping, brokers and semis lag.

NYSE- 1750 net losers;

NAZ- 1200 net losers;

NDX/OEX -15 green on each;

VIX- up 7% at 42.4;

Down volume about 8X the up;

TRIN- 1.68;

New home sales way lower than expected at 330k vs. about 400K expected.

Markets moving down rapidly and yesterdays gain about 2/3's wiped out 30 minutes into trading. Sell signals abounded yesterday with VIX way too low at 15% below the SMA 10 and RSI (2) well over 95.

Looking for some support at NQ 1200.

THE FEDS

Every dip bought has been money made as folks want equities - and the markets are getting a bit over bought.

NYSE- 2300 net winners;

NAZ- 1540 net winners;

NDX- 95 GREEN;

OEX- 90 GREEN;

VIX- down 5.5% and under 40;

Up volume 10X the down;

TRIN- .81;

SPX has run past the SMA 50 at 868 and the RSI (2) level is over 96- oh and the VIX more than 15% below the SMA 10- so lots of sell signals lining up with the exception of the up trend which now appears withe SPX trading over the SMA 50.

So this fish is looking to unload some inventory at/near the end of the day.

EARLY LOOK

Markets are higher but well off their best levels. the DJIA +107, NAZ +30 and SPX +16.

Strong sectors- banks, brokers, internets, homies and oil service while telecom, drugs and utils lag.

NYSE- 2100 net green;

NAZ- 1275 net green;

NDX/OEX- 85 GREEN on each;

VIX- lower by 4% at 40.4;

Up volume 7X the down;

TRIN- 1.01- hmmmmm;

Financials leading the way on the talk of a bad bank to buy lots of the bad stuff - (heard this before)- markets clearly in front on lots of overhead resistance - My early play will be to buy the pullbacks as it seems to be one of those days where we probably close at/near the highs.

THE CLOSE

Markets closed higher but in the middle of the days range and was led by semis, financials, brokers, bonds and biotech- laggards telecom, retail and gaming.

NYSE- 1130 net winners;

NAZ- 685 net winners;

NDX- 70 GREEN;

OEX- 70 GREEN;

Light volume with up about 2.5X the down;

Gold down $5 and a hair under $900 while crude crashed to a shade under $42;

Traded the NDX today from the long side and its pretty easy to see that every one is waiting for a break in one direction or the other - today just chop but better from the long side.

SPX 845 here we go again in the middle of the 945/741 high and low and at the 50% retrace- Market seems to have a hard time getting through this area of resistance and just wondering if back down we go -

BIG on credit defaults;

More on the VIX ETN's;

DR. BRETT on Three Basic Setups;

MID MORNING STOCKS

Markets opened higher but have since flipped to a hair better than unchanged led by semis and small caps.

Strong sectors- semis, financials, banks, biotech and bonds while telecom, retail, oils and ags lag.

NYSE- 720 net green;

NAZ- 570 net green;

NDX/OEX- 60 GREEN on each;

VIX- down 2.5% at 44.65;

Up volume almost 2X the down;

Seems to be setting up as a choppy day strength in tech and weakness in energy- also seem to be stuck in the middle of the recent range topped by about 845/850 on the upside.

Gold seems to be hanging in well and is probably a buy on a further pullback-

THE PRE OPEN

Despite all the bad news - earnings/layoffs et al - markets continue to hang in and trade between the recent range of SPX 800/850- today I expect to be here and expect to trade.

Looking interesting GOLD and oil stocks which may be a good play to the red side - DUG.

Early futures are trading near fair value and of course some links:

Yes - I do pay some of the highest property taxes and it hurts everyone when prices are rapidly falling;

More from Woodward on the Bush years;

VIX reversals;

Birinyi with a question;

GOLD breakout;

The YTD Country performance;

MIDDAY MARKETS

Markets have been up all day and are now a bit off their best levels. The DJIA +85, NAZ +22 and SPX +12.



Strong sectors include shipping, oils, gaming and defense while internets, drugs, banks and brokers lag.



NYSE- 1650 net winners;

NAZ- 985 net winners;

NDX- 80 GREEN;

OEX- 80+ GREEN;



VIX- down about 4% at/near 45;



Up volume 3.5X the down;



Gold +$12 at $908;







Markets seems to running into the wall at the 50% retrace - high of 945 and low of 741 on the SPX- but still seems likely that the markets move higher in the afternoon- internals very strong and the dips seem to be getting bought.



And finally, Power Lunch and The Call vying for worst shows on CNBC- Erin - been going down hill for a while.

QUICK HIT

So if 6 of the DJIA 30 or 20% of the components went to ZERO - lets say AA AXP BAC C GE GM-the index would still be above the recent low of 7450 - as the removal of those six stocks is less than 500 points on the index- fun stuff.

PRE MARKETS

Equity markets are trading well below fair value this morning on the heels of a post 4 oclock sell off on Friday.

My comments will be limited today as I have some other stuff going on -

Anyhow, in Barron's some wonderful picks by the roundtable from Jan 2- BAC MSFT INTC etc- and its great that they constantly remind us that it is a "stock pickers market".

Some good links:

BESPOKE on the VIX;

Country default risk continues to move up;

Financial Preferred's NOT SO GOOD;

VIX ETN's coming;

Dowd on the Wacky Govs;

And oops- futures seem to be moving higher as S and P says GE ratings "unaffected" by Q4 earnings- love the ratings agencies.