Stocks Mixed into Final Hour as More Economic Optimism is Offsetting Higher Energy Prices

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Retail longs, Computer longs and I-Banking longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is neutral as the advance/decline line is slightly lower, most sectors are gaining and volume is above average. Oil has moved to session highs, rising $2.34 per barrel. The 10-year yield is grinding higher at 4.75%, right where I projected it to average for the year, yet stocks are modestly improving. This is likely leading to some short-covering as the many bears are unable once again to gain any meaningful downside traction. Moreover, retail and airlines are outperforming substantially. Homebuilders and brokers are at session highs. An Apple (AAPL) spokeswoman just confirmed that Apple will ship the iPhone in late June. The stock is surging to session highs. Most pundits and analysts continue to say almost reflexively that the economy is worsening. However, almost all the data I see point to an economic acceleration this quarter from a sluggish first quarter. This is the main reason for the recent mild rise in long-term rates, not rising inflation worries. The bears' thesis revolves around the housing downturn leading to an imminent collapse in the consumer as unemployment soars. Even as the economic data are improving, it seems the bears see every move higher in the market as unjustified and continue to see a market crash right around the corner. I continue to believe the many bears remain stunningly complacent. I expect US stocks to trade modestly higher into the close from current levels on short-covering, buyout speculation and more economic optimism.