Stocks Mixed into Final Hour as Stable Long-term Rates Offset Jump in Commodities

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Telecom longs, Biotech longs and Computer 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, sector performance is mixed and volume is about average. Corn is up 127% in about 13 months, recently going parabolic. As you can see from this corn chart, the gap between net commercial and net large speculator positions has never been wider. This is not a healthy development if you are long corn. Corn is in the grips of the same investment fund-driven speculative mania that has engulfed many other commodities over the last few years. I sense the frenzy is nearing a crescendo. While the mania looks to continue in the short run, I suspect a major top in corn will occur this year. The 10-year yield is just 2 basis points higher today, to 4.69%, despite the above-expectations CPI report, more hawkish Fed commentary and jump in commodities. The yield was 4.89% just three weeks ago. I continue to believe that the 10-year yield will average about 4.75% this year and the Fed will remain on hold. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and stable long-term rates.