Stocks Mostly Higher into Final Hour on More Positive Economic Data, Falling Energy Prices, Lower Long-term Rates

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Semi longs, Retail longs, Computer longs, Telecom longs, Biotech longs and Commodity shorts. I added to my (AAPL) long and took profits in another long 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 mostly positive and volume is heavy. I suspect that Apple Inc.(AAPL) has bottomed after its recent correction. I still expect a 50% gain for the year in the stock. Apple is still my second-largest long position, behind Google (GOOG). A number of pundits and analysts have commented recently that investor complacency is high. Only in a "negativity bubble" could current sentiment be construed as complacent, in my opinion. Short interest is near all-time highs, the general public completely shuns U.S. stocks, commodities are loved by all, herd sentiment gauges are mostly showing more bearishness than bullishness, investors seek negatively-spun information regardless of its accuracy and every move higher is seen as a major top or just another short-selling opportunity. All this pessimism with the DJIA at all-time highs and the S&P 500 approaching a triple-digit gain from the major bear market lows. I would argue that the fact that multiples have contracted relentlessly for three consecutive years is evidence that investors are overly focused on potential risks and surprises and not focused on the most likely outcomes. Since 1905, multiples have contracted for four consecutive years only twice. I still expect the herd to finally begin embracing this bull market this year as the S&P 500 breaks out to an all-time high to join the DJIA and Russell 2000. I expect US stocks to trade modestly higher into the close from current levels on lower long-term rates, lower energy prices, more economic optimism and short-covering.