Stocks Sharply Lower into Final Hour on Spike in Economic Pessimism, Profit-taking

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Semi longs, Computer longs, Retail longs and Medical longs. I added to my (SIGM) long and took some profits in my (TLT) long today, thus leaving the Portfolio 75% net long. The overall tone of the market is very negative today as the advance/decline line is substantially lower, every sector is declining and volume is above average. Investor anxiety is very elevated. Today’s overall market action is bearish. Trading this afternoon has taken on a panicky tone, which is usually indicative of at the very least a tradable bottom. The total put/call hit a high 1.42 again this morning and the ISE Sentiment Index hit a depressed 80.0. For the seventh day in a row, the NYSE Arms is high, hitting a very elevated 3.68. The VIX is surging 7% to a high 24.1. Today’s biggest losers are last year’s biggest winners. This is creating an excellent buying opportunity in many true growth stocks. I still expect large buyers to emerge next week. The 10-year swap spread is falling substantially to 61.36 basis points over Treasuries today, down from a peak of 87.50 in November, as credit market anxiety continues to diminish. I expect US stocks to trade higher into the close from current levels on short-covering and bargain-hunting.