Stocks Sharply Higher into Final Hour on Falling Commodity Prices, Declining Inflation Concerns, Bargain Hunting and Short-Covering

BOTTOM LINE: The Portfolio is substantially higher into the final hour on gains in my Internet longs, Semiconductor longs, Retail longs and Networking longs. I covered some of my (IWM), (QQQQ) shorts and added to my (TLT) and various commodity shorts today, thus leaving the Portfolio 75% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are higher and volume heavy. Measures of investor anxiety are mostly lower. Today’s overall market action is very bullish given the mostly weaker economic data and decline in commodity prices. For the month of May, the energy industry saw the greatest amount of net insider selling in the S&P 500. Insiders purchased $65,417,391 worth of stock. They sold $2,229,633,318 worth. This is the largest amount of insider selling in energy this cycle. This is especially significant considering it comes ahead of the hurricane season, and most expect to see another spike higher in energy prices during this time. I expect stocks to maintain gains into the close as declining inflation worries, short-covering, bargain hunting and a reversal lower in oil prices offset weaker economic data.