Stocks Lower into Final Hour as Long-Term Rates Rise

BOTTOM LINE: The Portfolio is slightly lower into the final hour as losses in my technology longs are more than offsetting gains in my energy-related shorts. I added to my (IWM) and (QQQQ) shorts, thus leaving the Portfolio 50% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mostly negative and volume is above average. Oil tanker rates have plunged over 60% from their peaks in November 2004. They have dropped almost 50% in the last four months. OPEC production cuts later this year should further pressure rates as overcapacity becomes more exaggerated. I am still short OMI (OMM), among others. The Bloomberg Tanker Index has fallen 15.1% since November 2004 highs. I expect US stocks to trade modestly higher into the close from current levels as long-term rates stabilize and bargain-hunting commences.