Stocks Lower into Final Hour on Political Concerns, Profit-taking and Slower Growth Worries

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Medical longs, Computer longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are declining and volume is below average. This morning on CNBC, instead of talking about the great third quarter for U.S. stocks, there was much talk that stocks are at the high end of a trading range that will last another decade. This is symptomatic of the current “negativity bubble.” As I have said many times before, there has never been a time in U.S. history when more market participants believed they benefited from a negative or trading range environment in the major averages. They must keep this belief in tact. The pendulum has swung way too far against U.S. stocks on a long-term basis, in my opinion. The “mother of all short-covering rallies” will begin when the predominant belief that the U.S. is in a secular bear fades. This will likely occur sooner rather than later. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and bargain-hunting.