Stocks Higher into Final Hour as Rates Stabilize and Oil Declines

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Internet longs, Semi longs and Biotech longs. I covered some of my (QQQQ) and (IWM) shorts, thus leaving the Portfolio 75% net long. The tone of the market is neutral as the advance/decline line is modestly lower, most sectors are higher and volume is above average. The Johnson Redbook same-store sales index rose 1.7% year-over-year last week vs. a 2.4% rise the prior week. The long-term average is a gain of around 2.5%. The Morgan Stanley Retail Index is 21.6% higher since late October, almost double the 11.5% gain for the S&P 500 (SPX) over the same time period. I expect retail to perform more in line with the market going forward. Stock selection will become even more important as consumer spending slows to average levels. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, stable long-term rates and lower energy prices.