Post- holiday market internals suggest upward bias as Feb. '07 crude oil plummets

Market internals suggest an upward bias in the post- holiday session especially in light of crude oil plummeting mid-morning regarding warm weather forecasts. Also, Iran vowed to defy UN sanctions on its nuclear research. Retail and oil names have been dropping while banks, materials, semi's, and trucking have stayed in positive territory. However, intermediate-term daily forecasts have been increasing for some sort of correction. Market indicators displaying corrective signals include:

1) extreme bullish sentiment (Investor Intelligence)

2) lower VIX numbers & lower daily put/call ratios

3) diverging daily New high/low indicies

4) diverging Transports Avgs. compared to Dow new highs

Adv/Dec & Up/Down ratios: 1.90, 2.13

TRIN: .90 falling

Sector Update:
Strong: REITs, semiconductor equipment, gold, diversified metals & mining, construction materials, fertilizers & chemicals

Weak: drillers, drug retail, oil & gas storage, computer & electronics retail, apparel retail, dept stores, oil & gas equipment, apparel & accessories, internet retail, general merchandise