THE OPEN

Equities open mixed as we appear to be at some near term support on the SPX - currently SPX flat, NAZ +6 and the DJIA -4.

Strongest sectors- internets, banks, semis, brokers and biotech while nat gas, homies, metasl, gaming and reits lag.

NYSE- 780 net losers;

NAZ- 100 net winners;

SPX- 195 GREEN;

NDX- 46 GREEN;

TRIN- .63 with up and down volume about equal;

VIX- flat at 24.45 and about 15% above the SMA 10.

Gold a bit lower while the dollar is a hair higher.

Equities feel like they want to go down although support on the SPX at near 1090 level - the SMA 100M near here at 1088- thinking that is not going to hold and this fish is holding powder - did buy some SSO the other day but waiting to add more - right now doesn't feel quite right.

STILL OVERSOLD

Equity markets closed higher today but hardly the big bounce many expected - SPX +5, NAZ +5.5 and the DJIA +24.

Strongest sectors included - semis, energy and retail while metals, biotech, internets and drugs lagged.

NYSE- 430 net winners;

NAZ- flattish internals;

NDX- 57 green;

SPX- 300 GREEN;

TRIN- .94 with up volume about 1.5x the down;

VIX- down 7% and now only about 28% above the SMA 10.

Buy and long signals still the case as most volatility indexes way over bought - as follows:

VXO- 22% above SMA 10.

VXN- 27% above SMA 10.

RSI 2 levels as follows:

SPX 23

NDX 21

DJIA 15

NAZ 16

Tomorrow is TT so lets see what it has - currently AAPL trading up a bit in AH - while the futs are within a point of where they closed.

BUY MORTIMER

In the picture above- the VXO volatility index (OEX)- plotted against the SPX 500- also included in the VXO chart are bollinger bands between 2/3/4 standard deviations from the 50 SMA - and right now about as stretched as they get- our friend Fari calls these sigma channels- and I bet he would reach a similar conclusion-

Other recent times that the VXO was stretched - although not quite this far:

March 6- 09 SPX 693

July 8 -09 SPX 880

Sept 2- 09 SPX 995

Oct 2-09 SPX 1025

Oct 30- 09 SPX 1036

So here we go again - stretched at 4 standard deviations on the VXO - my best guess - BUY MORTIMER.