Stocks Lower into Final Hour on Housing Worries

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Medical longs, Networking longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is very negative as the advance/decline line is substantially lower, almost every sector is lower and volume is below average. The Fed's Fisher just finished speaking on CNBC. He said he doesn't see any signs of stagflation. Stagflation is defined as negative or stagnate growth, accompanied by high unemployment and high prices. Growth in the first quarter was a booming 5.6%. Unemployment is 4.6%, low by historic standards. Inflation is modestly above long-term average levels, not high. As I said last week, the U.S .economy is nowhere near a stagflationary state. The fact that we are seriously discussing stagflation at this point is a direct by-product of the negativity bubble and the record number of market participants who perceive that they benefit from a declining or stagnate U.S. stock market. I expect US stocks to trade modestly higher into the close from current levels on lower energy prices, short-covering and bargain hunting.