Stocks Modestly Higher into Final Hour as Commodity Prices Fall and Interest Rates Stabilize

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Networking longs, Retail longs and Biotech longs. I covered some of my (IWM)/(QQQQ) shorts and added (CYMI) long, thus leaving the Portfolio 75% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, sector performance is mostly positive and volume is heavy. The CRB Index is breaking down convincingly through its 200-day moving average today for the fist time since June 2003. The Index has fallen almost 10% since late January. A weekly close below 310 on the CRB would put the entire uptrend in jeopardy that has been in place since Nov. 2001. I expect this to happen over the coming weeks. This will lead to decelerating inflation readings throughout most of the year. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower energy prices and stabilizing long-term rates.