Stocks Soaring into Final Hour on More Economic Optimism, Buyout Activity, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Software longs, Retail longs, I-Banking longs and Semi longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is very positive today as the advance/decline line is substantially higher, every sector is rising and volume is above average. Reuters is reporting today that Apple's (AAPL) largest German retailer is getting 1,000 inquiries per day about buying the new iPhone. Back when the initial announcement was made concerning the iPhone, with the stock around $80-$90 per share, several of the many bearish pundits said the phone wouldn't sell overseas. Since then, I have read quite a few reports that may suggest otherwise. It is critical not to forget that this is Apple's first stab at a new major product in the massive telecommunications market. Due to the superiority of the operating system vs. the competition, I suspect that Apple will be able to keep new versions of the phone at much higher price points for much longer than analysts expect. I still think it is very possible that Apple will eventually dominate the handset market like no other company in history. As much as it sounds impossible, I continue to believe even the most optimistic analysts are underestimating the future overall financial prospects for the company. It remains my second largest-long stock position behind Google (GOOG). The Yale School of Management Crash Confidence Index is showing the individual is currently the most concerned about a stock market crash since November 2002, right near the trough of one of the worst bear markets in U.S. history and the record-setting low for the index going back to 1989. This extreme pessimism corresponds with the recent parabolic rise in short interest and is symptomatic of the current U.S. "negativity bubble," which is laying the groundwork for the beginning of the "mother of all short-covering rallies." I expect US stocks to trade mixed-to-higher into the close from current levels on bargain-hunting, more economic optimism, buyout speculation and short-covering.