Stocks Mostly Lower into Final Hour on Profit-taking and Higher Energy Prices

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Computer longs and Retail longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are lower and volume is above average. Johnson Redbook weekly retail sales rose 2.7% this week. This is up from +0.2%, unchanged, +0.1% and +0.1% over the last four weeks. As well, this is just slightly below the 50-week average of +2.9%. I suspect with expectations dramatically lowered for the retail group, sales will actually exceed expectations this summer. If gas prices are peaking for the year right about now, as I suspect, retail sales should move back above average levels this fall. The Morgan Stanley Retail Index is still 6.3% higher year-to-date, despite the recent pullback in the stocks on consumer collapse fears. As well, the ABX-HE-BBB-07-01 subprime index, the source of much angst during the blow-off top in subprime fears in March, made a higher high yesterday and is up 17.6% from its lows. This is a big positive. I expect US stocks to trade mixed into the close from current levels as profit-taking and higher energy prices offsets better economic data and buyout speculation.