DJIA Making Another Record High into Final Hour on Positive Economic Data

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Telecom longs, Biotech longs, Retail longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is about even, most sectors are rising and volume is heavy. Level 3 Communications (LVLT) is trading 2.2% higher today, near session highs on good volume, even as the major averages and breadth are near session lows. Level 3 is my favorite low-priced speculative stock for 2007 as it becomes increasingly obvious that it is one of the main beneficiaries of the explosion in video over the net. I expect the stock to rise at least 50% next year. The ECRI Weekly Leading Index (ECRWWLI Index on Bloomberg) broke out to a new cycle high this week. It has surged from 135.1 in August to 140.8 currently. It had been bouncing around 135 to 139 for 17 months. The growth rate of the weekly leading index is now 2.8%, up from -1.7% in mid-August. I continue to believe economic growth will come in around 2.5% for this quarter. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, more economic optimism, buyout speculation and portfolio manager performance anxiety.