S&P 500 1,233.38 -.11%
DJIA 10,687.24 +.01%
NASDAQ 2,199.07 -.16%
Russell 2000 662.33 -.65%
DJ Wilshire 5000 12,314.11 -.16%
S&P Barra Growth 590.04 -.12%
S&P Barra Value 639.03 -.10%
Morgan Stanley Consumer 591.91 -.49%
Morgan Stanley Cyclical 750.52 +.83%
Morgan Stanley Technology 515.24 -.08%
Transports 4,047.33 -.64%
Utilities 386.82 -.31%
Put/Call .96 +43.28%
NYSE Arms .72 +11.57%
Volatility(VIX) 12.25 +5.33%
ISE Sentiment 183.00 +8.93%
US Dollar 92.09 +.12%
CRB 314.62 -.29%
Futures Spot Prices
Crude Oil 57.60 +.03%
Unleaded Gasoline 149.50 +.67%
Natural Gas 11.62 -.79%
Heating Oil 173.00 +.52%
Gold 469.10 -.06%
Base Metals 140.02 +.16%
Copper 191.35 +.42%
10-year US Treasury Yield 4.59% +.65%
Leading Sectors
Papers +6.16%
Oil Service +1.41%
Semis +.72%
Lagging Sectors
Coal -1.50%
Airlines -1.56%
Steel -1.89%
BOTTOM LINE: The Portfolio is higher mid-day on gains in my Internet longs, Semi longs, Medical longs and Medical Information System longs. I added ELOS long this morning and added to existing shorts, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is lower, sector performance is mixed and volume is light. Measures of investor anxiety are mostly higher. Overall, today’s market action is positive considering recent gains and the rise in rates. Sanford C. Bernstein is out with a report today saying that prime brokerage fees from hedge funds will top $7.5 billion this year, up 32% in two years. Bernstein estimates these fees will rise by another 33% by 2009. According to Hedge Fund Research Inc., hedge fund assets have risen 2,650% to $1.1 trillion since 1990. These facts underscore my point last week that there has been a massive shift of capital from institutional and high-net-worth investors since the bursting of the bubble in 2000. Assets have shifted from long-only strategies into strategies that are negatively correlated or have a low correlation with the U.S. equity market, which could in turn spur a substantial short-covering rally over the intermediate term.
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