Stocks Slightly Lower into Final Hour on Political Worries and Bounce Higher in Rates and Oil

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Internet, Telecom and Retail longs. I covered the remainder of my (IWM), (EEM) and (QQQQ) hedges today, thus leaving the Portfolio 100% net long. The tone of the market is modestly positive as the advance/decline line is higher, sector performance is mixed and volume is about average. I suspect the lows of the day are in place as we see some short-covering into the afternoon. I believe stocks would be sharply higher today if it were not for the election next week. The healthy jobs report and ISM Non-Manufacturing report should alleviate fears that the economy is slowing too much. The service sector accounts for almost 90% of U.S. economic growth. Considering how much oil and long-term rates have fallen, today's bounce higher should not be of concern. The Saudi Tadawul All Share Index (SASEIDX Index on Bloomberg) recently broke down to new cycle lows. It has now plunged 54.8% from February highs. Its demise foreshadowed the $22 per barrel decline in oil. I continue to believe oil has further to go on the downside and will test $50 per barrel before year-end. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and diminishing economic growth concerns.