Stocks Sharply Higher into Final Hour as Irrational Pessimism Lifts Further

BOTTOM LINE: The Portfolio is higher heading into the final hour on gains in my Medical longs, Networking longs, Semi longs and Internet longs. I covered some of my (EEM) shorts and exited my (IWM)/(QQQQ) 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, every sector is gaining and volume is about average. Uncertainty is high. Sentiment is depressed. I sense there is much complacency in the bear community regarding the recent bottom. It is assumed by most, even many bulls, that that lower lows are coming. We have heard for weeks, just like we have on every pullback since the bottom a few years ago, that a crushing bear market is imminent. I continue to believe most stocks have seen their lows for the year and that a meaningful bottom is in place. It is time for the bulls to step up. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, less irrational pessimism and bargain hunting.