Stocks Sharply High into Final Hour on Falling Long-term Rates, More Economic Optimism, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my I-Banking longs, Internet longs, Retail longs, Medical longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is higher, almost every sector is gaining and volume is about average. I went to an Apple(AAPL) store and an AT&T(T) store over the weekend. The AT&T store was packed, and they were already out of stock of the iPhone on Saturday morning and directing people to the Apple Store. Apple appears to have done this intentionally and it seems like a good strategy. The Apple Store was packed on Sunday evening 30 minutes before the mall closed. There were about 50 people huddled around the iPhone display that had about 10 phones for demonstration. There were another 50 customers in the store checking out Macs and Apple TVs. The first thing that struck me about the iPhone was the design. It is a quantum leap from the current calculator look of most smart phones. It is ultra sleek and feels very well made. I am quite certain well-heeled trendsetters will love this phone. The real key to iPhone’s future success is the operating system, in my opinion. It is very easy to use, visually superior and performs flawlessly. It will likely take the competition a couple of years at least to catch up with this operating system. I use the internet quite often on my 8525, which is on AT&T's 3G network. The iPhone display models were using the store's wifi network. The internet was significantly faster than my 3G surfing experience and I am sure a 3G iPhone isn’t too far away. The iPhone browser is far superior to any others, in my opinion. The integration of YouTube and Google Maps is very impressive. The bottom line is that, in my opinion, the ramifications of this phone to the competition are still underestimated, notwithstaning the recent hype. If I were a long-term investor in Research In Motion(RIMM), I would be very concerned. As well, I think this phone could put a major manufacturer out of the business completely. A few tweaks, new functions and price drops and this phone will dominate the market like no other manufacturer ever has, in my opinion. Of course the competition won't stand still, but the operating system puts them so far behind it will be very hard to catch up. Finally, the "halo" effect is larger than ever. I continue to believe that Apple's future has never looked brighter and that even the most optimistic analysts are underestimating the company's financial prospects. At 33x forward conservative estimates, I still think the stock has substantial upside left from current levels. Apple remains my second-largest long position, right behind Google Inc.(GOOG). I expect US stocks to trade mixed-to-higher into the close from current levels on lower long-term rates, more economic optimism, bargain-hunting and short-covering.