Stocks Lower into Final Hour on Profit-taking and Political Uncertainty

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Retail longs and Internet longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is substantially lower, almost every sector is declining and volume is about average. I think most of today’s decline is related to the potential for significant political changes after the mid-term election next week and profit-taking after one of the best Aug/Sept/Oct market runs in US history. The Master Card data today and recent retail sales reports show consumer spending, which accounts for two-thirds of the growth in the US economy, remains strong. Yesterday's October consumer confidence number came in at 105.4, slightly below September's upwardly revised reading of 105.9. This gauge is still being skewed by depressed sentiment in the Northeastern part of the country. Here is a breakdown of consumer confidence by region:

• Northeast Central -- 78.10
• New England -- 86.60
• Mid-Atlantic -- 97.10
• Northwest Central -- 105.90
• Southeast Central -- 108.20
• South Atlantic -- 118.70
• Pacific -- 124.10
• Mountain -- 130.70
• Southwest Central -- 132.20

As I have said many times before, there are more market participants currently than at any other time in U.S. history that perceive they personally benefit both politically and financially from a declining or stagnant U.S. stock market. I still believe the fact that most financial media and investment funds are located in the Northeast is resulting in the overwhelmingly negative commentary that is so pervasive today despite DJIA record highs. I expect US stocks to trade mixed-to-lower into the close from current levels on political worries and profit-taking.