Stocks Modestly Higher into Final Hour Despite Falling Commodity Stocks

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Biotech longs, Computer longs, Retail longs, Networking longs and Energy-related shorts. I exited my (IWM)/(QQQQ)shorts, added a (VLO) short and exited an existing long today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are higher and volume is above average. Copper inventories at the London Metal Exchange (LME) are at the highest level since Sept. 2004 and have risen 313% since July. On an absolute basis, supplies are still historically low, but I expect this to change as the year progresses. I will look to short Phelps Dodge (PD) on any substantial bounce. I continue to believe that the declines in almost all commodities are not the result of any substantial U.S. economic slowdown. They are more a function of the end to the commodity mania. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower long-term interest rates, lower commodity prices and bargain hunting.