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BOTTOM LINE: The Portfolio finished about even today as gains in my Semi longs and Computer longs offset losses in my Telecom longs and Medical longs. I did not trade in the final hour, thus leaving the Portfolio 75% net long. The tone of the market was neutral today as the advance/decline line finished slightly lower, most sectors rose and volume was slightly above average. Measures of investor anxiety were mostly higher into the close. Today's overall market action was modestly bullish. The bears again failed to gain downside traction in the face of potential downside catalysts. The 10-year yield finished at session lows, falling almost 7 basis points to 4.6%. Oil is .37 higher, recouping this morning's losses, but still trades very poorly considering numerous bullish catalysts. Today's action was very good for the bulls. It allows the market to work off its overbought state and bears to reload without resulting in any technical damage. The market continues to trade exceptionally well ahead of significant uncertainty regarding the election outcome next week. The S&P 500 has risen about 17% over the last year due mainly to historically strong earnings growth. The forward P/E on the S&P 500 has barely risen. It now stands at a very reasonable 15.7. A few months ago many believed earnings growth this quarter would plunge. Instead, with much of the S&P 500 reporting, earnings are coming in 17.2% higher. This marks the 17th consecutive quarter of double-digit profit growth, the best streak since record-keeping began in 1936. I still believe P/E multiple expansion will continue, and likely accelerate, over the intermediate term, pushing stocks substantially higher from current levels.
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