Stocks Surge Substantially from Morning Lows on Heavy Volume

BOTTOM LINE: The Portfolio is about even into the final hour as gains in my Computer longs and Retail longs are offsetting losses in my Medial longs. I covered some of my (IWM) and (QQQQ) hedges into this morning’s weakness, thus leaving the Portfolio 75% net long. The tone of the market is modestly negative as the advance/decline line is modestly lower, sector performance is mixed and volume is very heavy. Subprime and emerging markets are investors' two chief worries. The subprime indices are stabilizing. Given that most emerging markets are getting very oversold short term, I wouldn't be surprised to see nice gains tonight in Asia. Considering the extent to which hedging and selling has occurred over the last three days, too much hot money may be leaning the wrong way. My intraday gauge of investor angst is still very elevated. As well, considering downside volume is once again swamping upside volume, the major averages' minor losses must be disturbing to the many bears. The airline, gaming, homebuilding, HMO, disk drive, software, restaurants, I-banks, Banks, computer hardware, steel, oil service, energy and utility sectors are now in positive territory. Tech leader Apple (AAPL) is near session highs, surging 3.8%. AppleInsider.com reported today that Pacific Crest made comments in a morning note that Mac sales accelerated to over 100% growth during the month of January vs. 55% growth in December. This surge also comes amid an increase in average selling prices.This bodes very well for Apple's (AAPL) upcoming quarter, and I believe that it is a sign of things to come for the entire year. I still expect the stock to rise at least 50% this year. It remains my second-largest long position. I expect US stocks to trade modestly higher into the close from current levels on short-covering, better economic data and bargain-hunting.