Stocks Higher into Final Hour, Led by Sharp Gains in Technology and Biotech Shares

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Computer longs, Semi longs and Commodity shorts. I covered my (EEM), (IWM) 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 above average. Bloomberg is reporting that Pimco's Bill Gross is predicting the Fed will cut rates within six months and that the Fed Funds Rate will finish the year 100 basis points lower at 4.25%. He is also predicting the 10-year yield will fall to about 4.5%. I do not believe the Fed will cut that much this year, however one or two cuts are likely as inflation concerns fall off a cliff with commodity prices. I expect US stocks to trade modestly higher into the close from current levels on short-covering, declining long-term rates, bargain-hunting and lower energy prices.