Stocks Higher into Final Hour on Bargain-hunting, Short-covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my I-Banking longs, Medical longs and Software 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 mixed, sector performance is mixed and volume is about average. The 10-year yield is down 2 basis points from today's highs. This is helping to boost the major averages near session highs. As I said last week, I suspect that we have seen the highs for the year in the 10-year yield at 5.24% last Thursday morning. The most recent COT report showed large speculators cut their net long position in the 10-year significantly last week. Moreover, I expect this week's economic data to help bring rates back down. I still think there is a good chance that the 10-year yield can touch 5% again by week's end. Finally, I wouldn't be surprised to see another bout of commodity weakness in anticipation of another interest rate hike in China, which will further reduce diminishing inflation worries. I increased my core iShares Lehman 20+ Year Treasury Bond (TLT) long meaningfully into last week's weakness. I expect falling rates and better-than-expected earnings reports to propel stocks to new record highs over the coming weeks. I expect US stocks to trade mixed into the close from current levels as bargain hunting and short-covering offsets higher energy prices and profit-taking.