MIDDAY LOOKS

Markets continue higher and are at/near the highs of the day. Biggest index winners include RUT/NDX DJIA in that order.

Strong sectors include banks, homies, ags, gaming retail and telecom while defense, utils, metals and energy lag.

NYSE- 1800 net green;

NAZ- 1040 net green;

NDX/OEX- 85 WINNERS on each;

VIX- lower by 2.5% at/near 42.7;

Volume- fairly light but 8/1 up to down;

Buying pullback continues to be the way to go as tech leads - so ROM dips looking good along with QLD -

My suspicion is the market will run into some trouble next week as we get the sell the news on the bank/ stimulus plans.

OPENING MOVES

Markets open higher on the heels of another horrible jobs number- 595,000 jobs lost in the month of January.

Strong sectors include banks, ags, gaming, telecom and real estate while utils, bonds, energy and drugs lag.

NYSE- 1640 net winners;

NAZ- 1085 net winners;

NDX- 85 GREEN;

OEX- 90 GREEN;

VIX- down 5.5% at 41.3;

TRIN- .5 with Up volume almost 10x the down;

SPX 850 now firmly in the rear view and markets are being led by financials and tech so seems like a buy the dip day - next week some news will be out capital for banks and other government/more government programs- question is if this is now the place to fade next weeks news?

MORNING JOBS

Markets closed higher with the SPX +13.5 and the NAZ +31 while the DJIA falls off the shark radar for good - dopey index 4ever.

Strongest sectors included gaming, energy, brokers, ags and retail while real estate, bonds, utils and shipping lagged.

NYSE- 840 net green;

NAZ 840 net green;

NDX- 80 GREEN;

OEX- 70 GREEN;

VIX- flat at 43.5;

Up volume 3X the down;

Congrats to Ken Lewis for buying $1.7 million of BAC stock- the equivalent of most folks buying a box of paper clips in relative net worth basis- meaningless in my opinion - only matters for PR.

Markets a bit over bought with RSI (2) reading of 78 on the SPX and 93 on the NDX-

Tech and energy continue to lead and I expect that to continue - a pretty good market neutral trade still available long QLD v long DXD-

Also, expecting a better number tomorrow morning for jobs- as I suspect most are too bearish for the moment.

AFTERNOON CHECK

Markets are trading a hair off the highs of the day with brokers, gaming, tech, semis, retail, ags and energy leading while bonds, real estate and utils lag.

NYSE- 840 net green;

NAZ- 900 net green;

NDX- 80 GREEN;

OEX- 75 GREEN;

VIX- near the flat line at 43;

TRIN- .8 with up volume more than 2x the down;

Markets looking ok but over bought especially on the tech heavy NAZ/NDX index. Note those indexes the only ones trading over the SMA 50 (1196) on the NDX while the SPX is about 25 under the 870 number and the DJIA aobut 450 under the SMA 50 at 8500.

Not sure why the markets are moving up on the bad news - but it really doesn't matter - it does what it does. Tomorrow is payroll number day and from the looks of the action - folks are expecting a better number.

Continuing here long QLD and DIG as energy continues to trade well.

THE OPEN

Markets open lower on the heels of some ugly guidance from CSCO and a bunch of others. Note however, the NQ futures, which were down big after the close yesterday and this morning are now the best performer.

The long QLD/DXD trade looking pretty good as every DJIA stock except WMT is lower - biggest losers include BAC C JPM AXP GE DIS HPQ BA GM AA.

GE is going to get a long look as it now trades with a $10 handle - and if it gets into single digits- we can expect a lot of chatter about their leadership and prospects.

NYSE- 1300 net losers;

NAZ- 470 net losers

NDX - 40 GREEN;

OEX- 15 GREEN;

VIX- higher by 5% at/near 46;

Gold - higher by $15 at $922;

Looking for a bounce later in the day led by the NAZ/NDX as folks still are looking for tech to lead out of this "downturn." Looks like they also expect financials like C BAC WFC to come out looking far different than they look now.

THE CLOSE

The NAZ and tech still in the green a bit before the closing bell while BAC KFT DIS PFE GM T VZ WMT AA all DJIA components and all red.

Interesting to also see the RSI (2) diversion between tech and the DJIA-

NAZ 71

NDX 77

SPX 41

DJIA 31

MSH 79

SMH 86

A future trade for this fish long QLD and long DXD- as the DJIA just looks like an awful index stuffed with lousy stocks.

Tech and energy probably the place for an intermediate term trade.

MIDDAY MELT

Markets are higher on the day if you exclude the DJIA, and how long will it be before the index gets a facelift as AA AXP BAC C GE GM are no longer meaningful in the computation.

The NAZ/NDX continues to lead with tech stocks continuing to out perform - note MSFT INTC GOOG RIMM and AAPL.

NYSE- 400 net green;

NAZ- 325 net green;

NDX - 70 GREEN;

OEX 60 GREEN;

VIX- flat near 43;

Selling off as I type and not looking to establish more positions here - although DIG and QLD are probably good places to go on the next pullback.

THE OPEN

Markets are strong again this morning led by the NAZ/NDX and tech while the DJIA is weak.

Strong sectors- shipping, energy, homies, semis, ags and banks while gaming, bonds and retail lag.

NYSE- 1130 net winners;

NAZ- 780 net winners;

NDX/OEX - 80 green on each;

VIX- down 3% at 41.75;

Up volume 2.5X the down;

TRIN- 1.04;

GOLD higher by $7;

Markets look good for the bulls as they arent letting the dippers in YET- tech looking good with INTC MSFT GOOG RIMM APPL all very strong.

Gaming horrible yet again as now it looks like MGM LVS WYNN - all with big problems and I suspect many think they wont make it.

OH CANADA

Futures are higher before the open but trading a hair below fair value.

One tidbit I will steal from TGL - ( The Gartman Letter)- he is long the Canadien currency v the dollar and is also liking the EWC - Why, because the President seems to be very opposed to the protectionist policy outlined in the stimulus package- Obama said as follows to ABC News:

"A signal of protectionism from the US would be a mistake right now - trade is sinking all across the globe... we need to make sure that any provisions that are in there are not going to trigger a trade war."

Gartman says even dubya wasn't as clear on trade policy- hence he is getting longer EWC and FXC as he suspects Canada will be a big beneficiary and I am going along with the trade.

THE CLOSE

Markets moved on up as my suspicion proved pretty good - financials still ugly led lower by WFC GE C BAC and JPM.

Sector strength - homies, shipping, biotech, internets, retail and drugs while gaming, banks and real estate lagged. RUT also struggled all day after being strong of late.

Breadth not so great as 640 net green on NYSE and 400 net green on the NAZ.

VIX- down by 5.5% at 43;

10 Year Treas - rate moving on up at 2.842% as money comes out of low risk and moves to higher risk -stocks.

RSI (2):

SPX 64

DJIA 61

NAZ 71

NDX 75

Probably the end of the rally temporarily as folks start to think about the Friday jobs report and the ADP info.

Why did we rally today?

Dashle stepping out;

Republicans with another stimulus idea;

Coiled markets;

LATE MORNING LOOK

Things looking better for the bulls as the NDX is retaking the lead and trying to hang above 1200 on the futures, improving internals on the OEX/NDX, EURO moving up and $$$$ down-

Financials still in the red with JPM GS BAC WFC all ugly.

WINNERS- MRK AA MSFT TYC AVP UPS FDX NYX SGP HOLX STLD EBAY VRSN ISRG;

LOSERS- SNDK WYNN LAMR QCOM FLIR DISH LEAP AMLN JNPR BAC COF RF JPM AXP GS USB GM DIS INTC;

Bottom line- looking for a move up later today.

THE OPEN

Markets are a bit dissapointing as they open mixed tech trailing and the DJIA leading.

Strong sectors- homies, shipping, biotech, metals and drugs while gaming, semis, reits, banks and oils lag.

NYSE/NAZ flat internals;

NDX- 33 GREEN;

OEX- 60 GREEN;

VIX- flat at 45;

Up volume 2X the down;

TRIN- .58;

Markets moving up as I type as my initial hunch is probably correct and there is a bid to the markets. One problem, sector strength continues to flip flop - tech weak today and strong yesterday etc-

NUMBERS

Futures are trading flat a few hours before the opening bell - but some interesting stuff when one looks at the charts.

First, the VIX trades approximately at its SMA 10 and actually seems to be in a down trend;

Second, check the charts on the QQQQ, the SMA 10 and SMA 50- about the same spot- RSI (2) also smack in the middle at a reading of 52;

So with all the bad news- and with DOW this morning- markets still refuse to head lower I am getting a little bullish here as the NDX/NAZ/RUT/TECH/SEMIS acted very well yesterday despite poor action in the large caps.

Bottom line- unless something changes I will be looking to step on the pedal to the long side and looking for QLD and UWM.

THE CLOSE

Markets closed the day choppy with the NAZ higher while the SPX was flat and the DJIA was lower by about 64.

NYSE- 300 net losers;

NAZ- 200 net winners;

NDX- 60 GREEN;

OEX- 40 GREEN;

Gold down $23;

Crude down around $40;

VIX - a tad higher at 45.55;

Markets chopped around most of the day with tech and semis higher while metals and energy were lower. Taking it one day at a time for now - although turn around Tuesday looms.

MIDDAY CHOP

Markets have flipped to flat as the early strength in the NAZ/NDX was a pretty good signal of a short term rally.

Strongest sectors include internets, semis, biotech, telecom, tech and drugs while metals, junk bonds, shipping and defense lag.

NYSE- 470 net losers;

NAZ- flat;

NDX/OEX - 55 greeen on each;

Down volume a hair better than up;

TRIN- 1.04;

GOLD down about $16 while Crude is down about 50 Cents;

Markets are over sold and with an old NFC team winning the super bowl- well - yeah looks like a choppy market for the balance fo the day - but its probably a good sign that we didn't go under the 7900 level on the DJIA or 800 on the SPX.

THE OPEN

Marekts open lower with the DJIA lower by 100 and some notable strength in tech and semis.

NYSE- 1450 net losers;

NAZ- 450 net losers;

NDX- 40 GREEN;

OEX- 25 GREEN;

VIX- higher by 9% at/near 48.75;

Down volume 4X the up;

Weakness in GE which is now at the lowest point since 1996- some guy on TV this AM talking about buying dividend paying stocks like GE for downside protection- the GE dividend gets eaten up in minutes of trading- not sure why our friend ERIN didn't challenge this great idea.

WSJ reporting that the cost of insuring $10 million of five year Treasurys is about $66,000 up from $7,680 a year ago. I guess that is part of the reason gold is moiving on up as folks have less confidence in reserve currencies. And yes those CDS contracts are supposed to be paid in EURO's should the US default- EURO's huh?

GOOD BAD + UGLY

January is punched and things are ugly yet again:

Up on the year includes:

MS +26%

SGP +3.1%

OIH +4.35%

GOOG +10%

AAPL +5.6%

GLD +5.5%

The Bad:

SPX -8.6%

DJIA -8.8%

NAZ -6.4%

NDX-2.6%

MID -7.4%

RUT -11.2%

THE UGLY:

BKX -35%

PFE -17%

BAC -39%

GE -25%

JPM -19%

C -47%

WMT -16%

The GE chart starting to look more and more like the chart of AIG- hmmmm.

And a terrific Gartman interview on Bloomberg;