Stocks Mixed into Final Hour

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Biotech longs and Retail longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is neutral as the advance/decline line is slightly lower, sector performance is mostly positive and volume is above average. The Fed's Poole spoke in New York. Here is a summary via Bloomberg:

• The U.S. economy is "sound" despite housing slowdown.
• Inflation is retreating as energy costs stabilize.
• Forecasters are predicting 3% growth during next two years.
• U.S. growth is about the same as potential rate.
• He favors 1.5% core price inflation goal.

Overall, these comments are constructive. I suspect that the next catalyst for higher stock prices will be the upcoming earnings season as investor expectations are low and fears over lower forward guidance are high. I expect companies and investors to gain more confidence in the sustainability of the current expansion as the year progresses. Reuters is reporting that Iran's Larijani, Secretary of the Supreme National Security Council, said that the sailor issue can be resolved without a trial. Oil is falling 0.50 from session highs on the news, which seems to be stabilizing the broad market. I expect US stocks to trade mixed-to-higher into the close on short-covering, buyout speculation, more optimism over the Iranian/UK situation and bargain-hunting.