Stocks Mostly Lower into Final Hour on Healthy Consolidation of Yesterday's Gains

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Computer longs, Networking longs and Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, almost every sector is lower and volume is very heavy. The Fed's Kroszner just finished speaking. He said that U.S. second-half growth is unlikely to be as robust and that the core CPI is just a bit higher than historical norms. Finally, he said the current U.S. inflation range is manageable. As you can see from this chart, inflation as measured by the CPI, is currently around levels seen in most of the 90s, lower than the 80s and much lower than the 70s. Investors' current obsession with inflation is just another by-product of the negativity bubble we are currently in. I continue to believe we are currently experiencing a modest bout of cyclical inflation within the secular trend of disinflation. The U.S. is nowhere near experiencing stagflation. In fact, the U.S. economy is much closer to a "Goldilocks" type of environment(not too hot or cold), yet the overwhelming majority of stories focus on the negative possibilities rather than the most likely scenarios. I expect US stocks to trade mixed-to-higher into the close from current levels on more short-covering and bargain hunting.