Stocks Lower into Final Hour on Economic Concerns and Profit-taking

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs and Technology longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is about average. Johnson Redbook weekly retail sales surged 3.9% last week vs. a 3.7% gain the prior week and 2.4% during this week last year. This is well above the long-term average and the highest weekly increase since the last week of September last year. Weekly retail sales have gained 3.4%, 3.7% and 3.9% over the last three weeks vs. weekly gains of around 2.75% the prior 3 months. In my opinion, this shows that while consumers are more concerned about the future, they feel better about their present situation, which is what this morning's confidence report showed. Anecdotally, I went to one of the largest malls in the country over the weekend. It was sunny and 75 degrees, yet the mall was packed and people were carrying bags. I continue to believe monthly retail sales are bouncing back sharply into the spring. Last week, I posted about the new all-time high in NYSE short interest. Last night, the Nasdaq reported that short interest also jumped to an all-time record. From mid February through mid March, short interest on the Nasdaq rose 12.1% to 7,890,000,000 shares. This was the largest monthly percentage increase since Bloomberg began tracking short interest in 1991. This is just more evidence of the very high wall of worry that was created earlier this month.

Here are the 20 Nasdaq stocks with the largest percentage increase in their short interest relative to their float from mid February through mid March:

1. LEND +34.8%
2. BLDR +23.2%
3. HCBK +22.8%
4. TTWO +18.8%
5. PRGX +16.7%
6. CPSL +16.1%
7. POSH +12.1%
8. NTRI +9.7%
9. NETL +9.2%
10. LJPC +8.7%
11. MALL +8.2%
12. VNDA+8.0%
13. ANDE +7.8%
14. ORBC +7.7%
15. PFCB +7.7%
16. CHCI +7.7%
17. BKUNA +7.5%
18. SFLY +7.4%
19. CAKE +7.1%
20. CBRL +7.0%

I expect US stocks to trade mixed-to-higher into the close on short-covering and bargain-hunting.