Stocks Continue Healthy Consolidation, Slightly Lower into Final Hour

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, most sectors are declining and volume is about average. The last seven trading days have seen the major averages make their daily lows early in the day and then surge modestly into the close. This is healthy consolidating action. My intraday gauge of investor angst has been elevated all day, considering the mild losses in the broad market. Given a stabilizing 10-year and a reversal lower in oil, I wouldn't be surprised to see day No. 8 of this type of action. I continue to believe cyclicals, which have been this years' best performers, will underperform for a few months as gains are digested, 4Q economic growth is revised lower and 1Q growth comes in below average rates. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates, stable energy prices and more optimism in the technology sector.