DJIA Hitting Another All-Time High into Final Hour on Economic Data, Buyout Speculation

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my I-Banking longs and Retail longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly positive as the advance/decline line is slightly higher, most sectors are rising and volume is heavy. The ECRI Weekly Leading Index is hitting a new cycle high and has a growth rate of 4.4%. Moreover, the bond market seems to like today's jobs number as the 10-year yield is down 3 basis points. The growth rate of the ECRI future inflation gauge is -5.7%, the lowest since January 2004. The Case-Shiller August Housing price futures are ticking higher again, from $214,800 last week to $215,400 this week. Tech stocks are outperforming today, boosted by news of the potential acquisition of Yahoo! (YHOO) by Microsoft (MSFT). While this deal makes sense on paper, I suspect it would indeed eventually become a mess on the scale of AOL/Time Warner (TWX). In my opinion, Google (GOOG), which I already view as egregiously undervalued relative to the broad market and its Internet peers, would be the monster winner. The gasoline crack spread is now 32.42, eclipsing the post-Katrina record highs set in 2005. While this is temporarily boosting prices in the energy complex, I continue to believe it is doing significant long-term damage to oil demand, which will become evident as the nationwide rash of refinery "outages" subsides. I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, short-covering, falling energy prices and buyout speculation.