Stocks Sharply Higher into Final Hour on Constructive Fed Comments, Falling Oil and Declining Long-term Rates

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Medical longs, Semi longs and Telecom longs. I covered my (QQQQ)/(IWM) hedges this morning, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, every sector is rising and volume is above-average. I have heard many market bears pointing to the low VIX again of late as a reason that stocks must fall. I continue to believe the bears remain stunningly complacent given the macro backdrop for US stocks. I really don't believe a low VIX means anything other than that volatility is low and will rise at some point in the future. Strong bull markets are normally associated with low VIX readings. As well, many bears have been pointing to the "very poor" action in the Nasdaq. The Nasdaq is now outperforming the Dow and S&P 500 this year, rising 3.0% vs. a 2.7% gain for the S&P 500 and 2.3% rise for the DJIA. I suspect the Nasdaq's outperformance will gain steam throughout the year. Another couple of days like the last two, and performance anxiety will likely come back into play for many investors that were convinced a market top or at least a meaningful correction was in order. The ISE Sentiment Index is plunging 17%, to a low 112.0, into today's strength. As well, the CBOE total put/call has been at above-average levels all day. The 10-year yield is at session lows, falling another 8 basis points, to 4.73%. Oil is near session lows, declining $1.06 per barrel. I expect US stocks to trade mixed-to-higher into the close from current levels on falling energy prices, declining long-term rates, short-covering and bargain hunting.