Stocks Surging into Final Hour on Strength in Commodities and Tech, Bounce in Financials

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Internet longs, Medical longs, Software longs and Computer longs. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is slightly positive today as the advance/decline line is mildly higher, most sectors are gaining and volume is heavy. The U.S. Dollar Index is dropping another 0.5%, which is contributing to the $2.85-per-barrel jump in oil. I think oil needs to display some signs of topping before the broad market can mount a significant rally into year-end. This will likely occur over the coming weeks as investors begin to price out another rate cut at the December meeting, which should lead to some firming in the dollar. As well, the upcoming hype surrounding oil's likely push to $100 per barrel could provide the last burst of excessive long speculation necessary to provide the catalyst for a major reversal. Fed fund futures now imply a 58% chance for another 25-basis-point cut at the December meeting, down from 62% yesterday and 64% one week ago. Briefing.com is reporting that rumors are floating around that Apple (AAPL) is working on a partnership with a Chinese company for iPhone distribution. Apple is less than a point away from its record high. If this rumor is confirmed, I suspect the shares will hit $200 before week's end. I still see substantial upside to the stock over the intermediate term. It remains my second largest long position, just behind Google (GOOG) and just ahead of Intuitive Surgical (ISRG). I expect US stocks to trade mixed-to-higher into the close from current levels on bargain-hunting and short-covering.