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 Internet longs and Biotech longs are more than offsetting gains in my Index shorts, Energy-related shorts and Networking longs. I added to my (IWM), (QQQQ) and (EEM) shorts today, thus leaving the Portfolio 25% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mostly negative and volume is heavy. The Johnson Redbook same-store sales index rose a robust 4.6% year-over-year last week vs. a 4.3% rise the prior week. This is the strongest reading since August 2005. The long-term average is a gain of around 2.5%. Notwithstanding this strong reading, I still believe retail sales growth is peaking for the year right about now. I expect US stocks to trade mixed-to-higher into the close from current levels on lower energy prices and short-covering.