Stocks Sharply Higher into Final Hour on Bargain Hunting, Short-Covering and Positive Economic Data

BOTTOM LINE: The Portfolio is substantially higher into the final hour on gains in my Computer longs, Internet longs, Biotech longs and Semi longs. I took profits in some more of my (EEM) short, added to my Apple Computer(AAPL) long and exited the remainder of my (QQQQ) and (IWM) shorts this morning, thus leaving the Portfolio 100% net long. The tone of the market is very positive as the advance/decline line is substantially higher, almost every sector is higher and volume is heavy. The AAII percentage of Bulls remained unchanged at 26.41% this week from 26.23% the prior week. This reading is still at depressed levels. The AAII percentage of Bears soared to 54.98% this week from 45.08% the prior week. This reading is now at very elevated levels. The percentage bears is the highest since February 2003. The S&P 500 has rallied 57% since bearish sentiment hit this level. I expect bullish sentiment to rise next week. I continue to believe overall investor sentiment toward U.S. stocks is at levels associated with meaningful market bottoms. I expect US stocks to trade mixed-to-higher into the close from current levels on more short-covering and bargain hunting.