Stocks Slightly Higher into Final Hour, Building on Recent Gains

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Computer longs, Medical longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is positive today as the advance/decline line is higher, sector performance is positive and volume is below average. The market continues to mostly ignore negative news and reward positive news, which should worry the many "crash-callers." Nasdaq reported recently that short interest on the exchange from mid-August through mid-September fell 7.4%, from 8.99 billion shares to 8.32 billion shares. However, as on the NYSE, over the last seven months, Nasdaq short interest has rocketed 18.2%, the largest seven-month percentage gain since at least 1991, according to Bloomberg. Here are the 25 Nasdaq stocks with the largest percentage increase in their short interest relative to their float from mid-August through mid-September:

1. Global Crossing (GLBC, +34.9%)
2. Lululemon Athletica (LULU, +18.9%)
3. Triad Guaranty (TGIC, +17.5%)
4. Superconductor Technologies (SCON, +12.4%)
5. Infinity Property and Casualty (IPCC, +11.5%)
6. Take-Two Interactive Software (TTWO, +9.1%)
7. Fuel-Tech (FTEK, +9.0%)
8. Bankrate (RATE, +9.0%)
9. Crocs (CROX, +8.6%)
10. Horsehead Holding (ZINC, +8.4%)
11. NutriSystem (NTRI, +8.3%)
12. Conns (CONN, +7.5%)
13. Tuesday Morning (TUES, +5.7%)
14. Corcept Therapeutics (CORT, +5.7%)
15. RF Micro Devices (RFMD, +5.5%)
16. Vineyard National Bancorp (VNBC, +5.4%)
17. Hoku Scientific (HOKU, +5.4%)
18. Theravance (THRX, +5.3%)
19. Synchronoss Technologies (SNCR, +5.0%)
20. Vermillion (VRML, +5.0%)
21. Silverstar Holdings (SSTR, +4.9%)
22. Atmel (ATML, +4.8%)
23. California Coastal Communities (CALC, +4.7%)
24. Salix Pharmaceuticals (SLXP, +4.5%)
25. True Religion Apparel (TRLG, +4.4%)

The S&P 500 also reported short interest data. Only two industries reported an increase in short interest, materials (+6.8%) and consumer discretionary (+0.3%) Here are the 25 S&P 500 stocks with the largest percentage increase in short interest relative to their float from mid-August through mid-September:

1. Jones Apparel (JNY, +18.5%)
2. Rohm & Haas (ROH, +11.6%)
3. W.W. Grainger (GWW, +7.4%)
4. Parker-Hannifin (PH, +3.9%)
5. Archstone-Smith Trust (ASN, +3.8%)
6. Marsh & McLennan (MMC, +3.8%)
7. Dillard's (DDS, +3.6%)
8. UST Incorporated (UST, +3.4%)
9 Bear Stearns (BSC, +3.4%)
10. MBIA (MBI, +3.4%)
11. DR Horton (DHI, +3.1%)
12. Verisign (VRSN, +2.8%)
13. Network Appliance (NTAP, +2.7%)
14. Ryder System (R, +2.4%)
15. Clorox (CLX, +2.2%)
16. Black & Decker (BDK, +2.1%)
17. Ambac Financial Group (ABK, +2.0%)
18. Big Lots (BIG, +1.9%)
19. RadioShack (RSH, +1.9%)
20. Sears Holdings (SHLD, +1.8%)
21. Family Dollar Stores (FDO, +1.6%)
22. Centurytel (CTL, +1.5%)
23. Masco (MAS, +1.3%)
24. Harrah's Entertainment (HET, +1.3%)
25. Circuit City (CC, +1.3%)

I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower long-term rates and investment manager performance anxiety.