Stocks Modestly Higher into Final Hour as Long-term Rates Fall and Fed "Pause" Speculation Rises

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Semi longs, Retail longs and Computer longs. I have not traded today, 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 mixed and volume is above average. The bearish sentiment regarding bonds right now is elevated. Moreover, a strong employment report on Friday is widely anticipated. While a modest sell-off in bonds is likely, an extreme negative reaction to a strong employment report appears unlikely. A below-expectations report would likely lead to a vigorous bond rally. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates and optimism in the tech sector.