Stocks Higher Into Final Hour as Oil Declines and Irrational Pessimism Over Earngings Subsides

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Biotech longs, Retail longs and Semi longs. I added to my PLAY long and NBR short, thus leaving the Portfolio 75% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are gaining and volume is above average. Measures of investor anxiety are mostly lower. The Johnson Redbook same-store sales index rose 3.3% year-over-year last week vs. a 3.1% rise the prior week. This week's gain is up from a 1.5% increase in late April, and it's the 38th week in a row that the index has risen 3% or more. Retail sales continue to remain healthy, despite higher oil prices. A healthy labor market, low long-term interest rates, falling energy prices and rising stock prices should cushion any weakness this year related to a slowing housing market. I expect US stocks to trade modestly higher from current levels into the close on short-covering.