Stocks Higher into Final Hour Even as Apprehension Remains High

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Retail longs and Medical longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is very positive as the advance/decline line is substantially higher, every sector is rising and volume is above average. Dow Jones is reporting that U.S. household net worth rose for the 17th consecutive quarter and hit another all-time record in the fourth quarter while consumer borrowing rose by the slowest pace in eight years, Federal Reserve figures showed today. The $1.4 trillion increase in household net worth last quarter followed an $839 billion gain in the third quarter and reflected a surge in stocks. Net worth related to real estate rose $246 billion for the quarter, which is very surprising. I am quite certain there will be very few stories in the financial or mainstream press regarding this very positive news. The ISE Sentiment Index plunged 30.3% to an extraordinarily depressed 46.0 this morning. It has been lower only three other days since the index began in October 2002. Its all-time low was 36.0 in July of last year. Moreover, its 10-day moving average is hitting an all-time record low of 91.80. While a test of the recent lows is possible, the historic intensity of recent selling likely presents longer-term investors another excellent entry point for long positions. I expect US stocks to trade mixed-to-lower into the close from current levels on rising apprehension ahead of tomorrow’s jobs report and sub-prime worries.