Stocks Rising into Final Hour on Less Economic Pessimism, Buyout Speculation

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Medical longs, Semi longs, Biotech longs and Computer longs. I covered my (IWM)/(QQQQ) hedges and some of my (EEM) short and added to my (UA) long today, thus leaving the Portfolio 100% net long. The overall tone of the market is positive today as the advance/decline line is higher, most sectors are rising and volume is above average. A number of market-leading stocks are moving back to session highs even as the odds of a 25-basis-point Fed rate cut at the upcoming meeting continue to fall. They are down to 30% now, from 40% yesterday. As well, oil is back to record highs. The market continues to display impressive resiliency. The NYSE Arms has been running above average all day, which is also a positive. Tech stocks are higher after Samsung posted positive results and raised memory capex. I expect semis to begin to participate more in the current rally over the coming weeks. Moreover, Oracle (ORCL) is paying a significant premium for BEA Systems (BEAS), and Oracle isn’t declining on the news. This is a big positive for tech, and I think more significant acquisitions will occur before year-end as many companies remain cheap relative to their prospects. I expect US stocks to trade mixed-to-higher into the close from current levels on performance anxiety, less economic pessimism and short-covering.