Stocks Slightly Higher into Final Hour

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Networking longs and Computer longs. I added to my (EEM) short and added (IWM)/(QQQQ) shorts this morning, thus leaving the Portfolio 75% net long. The tone of the market is slightly positive as the advance/decline line is modestly higher, most sectors are higher and volume is above average. Measures of investor anxiety are mixed. Today’s overall market action is mildly bullish given as stocks consolidate yesterday’s sharp rebound. The AAII percentage of Bulls fell to 26.23% this week from 30.77% the prior week. This reading is now at depressed levels. The AAII percentage of Bears fell to 45.08% this week from 50.0% the prior week. This reading remains at elevated levels. I expect bullish sentiment to fall again next week. I continue to believe overall investor sentiment toward U.S. stocks is at levels associated with meaningful market bottoms. I expect stocks to trade modestly higher into the close on short-covering, bargain hunting and lower long-term rates.