Stocks Higher into Final Hour on Falling Commodity Prices and Buyout Speculation

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Semi longs, Computer longs and Internet longs. I added a long position in (ILMN) and took profits in another trading long today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is modestly higher, most sectors are rising and volume is about average. Today's decline in Illumina(ILMN) is a severe overreaction by momentum players to the announcement of its purchase of Solexa(SLXA), in my opinion. I added this new long position when it was down about 12%. The Airline Index (XAL) has risen 23.0% since I highlighted the group back in September. It is up another 3% today to session highs. AMR (AMR), my favorite, has rocketed 52% over the same timeframe, making a five-year high. I expect airlines to continue to outperform over the intermediate term as the overwhelming majority of investors remain significantly underexposed to the group and fundamentals continue to improve. I expect US stocks to trade modestly higher into the close from current levels on short-covering, performance anxiety, lower energy prices and buyout speculation.