Stocks Modestly Higher into Final Hour as Oil Reverses Lower

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Internet longs and Networking longs. I covered some of my (IWM) and (QQQQ) shorts today, 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 heavy. The ISE Sentiment Index is falling 16% today to a below-average 143.0. Moreover, the spread between the index’s 10-day moving-average and its 200-day is the largest since Sept. 2004. These depressed levels come even as the S&P 500 approaches 6-year highs and has risen 74% from Oct. 2002 lows. The relatively low levels of investor complacency shown in many gauges of sentiment have to big a big worry for the bears. I expect US stocks to trade mixed-to-higher into the close from current levels on lower energy prices, lower long-term rates and short-covering.