Stocks Slightly Higher into Final Hour on Another Decline in Long-term Interest Rates

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Semiconductor longs, Internet longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is modestly positive as the advance/decline line is higher, most sectors are gaining and volume is modestly above average. JPMorgan put out a report this morning that said Nasdaq short interest actually rose 2.4% over the last 30 days adjusting for liquidity and M&A activity, substantially above the .8% number. As well, they said short interest in semis soared 27%, led by a 456% increase in short interest in shares of Applied Materials (AMAT), even as the SOX has returned 18.3% from July lows. Biotech short interest also rose 9% despite sharp gains in biotech shares during the month. I continue to believe the bears remain extraordinarily complacent given the magnitude of the recent rally and DJIA record highs. I expect US stocks to trade modestly higher into the close from current levels on short-covering, strong profit reports, lower long-term rates and investment manager performance anxiety.