Stocks Building on Recent Gains into Final Hour on Less Economic Pessimism

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Software longs, Internet longs, Semi longs, Gaming longs and Biotech longs. I added to my (ILMN) and (NUAN) longs and took profits in a trading long today, thus leaving the Portfolio 100% net long. The overall tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is heavy. Investor anxiety is above average. Today’s overall market action is very bullish, considering the sharp gains of the last two days. Many of yesterday’s laggards are rising substantially today and yesterday’s large winners aren’t giving back much, which is a very positive sign. Homebuilders and banks are even building on recent sharp gains. The MS Tech Index is substantially outperforming, rising 2.1%. The VIX is falling 4% today, but remains high at 27.70. I still think there are many other potential positive catalysts that could materialize at any time. The US equity markets continue to trade as if a meaningful bottom is now in place. While we are becoming a bit extended on a short-term basis, I seriously doubt a full retest of recent lows will occur as so many expect. I will closely monitor MSFT’s likely positive earnings report and conservative guidance and the market’s reaction to it. Apple Inc.(AAPL) is weak again today and I view the current price as an excellent entry point for both long and short-term investors. I will add again to my long position on any further meaningful weakness from current levels. Nikkei futures indicate another 160 point gain on the open in Japan tonight. I expect US stocks to trade modestly higher into the close from current levels on short-covering, less economic pessimism, gains in overseas markets and bargain hunting.