Stocks Lower into Final Hour on Profit-taking, Jump in Oil, Financial Sector Weakness

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Alternative Energy longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The overall tone of the market is bearish as the advance/decline line is lower, most sectors are declining and volume is below average. Investor anxiety is above-average again. Today’s overall market action is mildly bearish. The VIX is rising .5% and remains high at 25.9. The ISE Sentiment Index hit a very low 78.0 and the total put/call hit a high 1.27. Finally, the NYSE Arms has been high most of the day and is currently 1.43. Considering the news today and recent gains, today’s low volume pullback isn’t too bad. Many market leading stocks are actually rising. As well, wireless, commodity, construction, biotech and utility shares are all higher. The announcement by Senator Dodd that he plans an April 3 hearing into the Bear Stearns(BSC) deal seems to have killed a budding rebound in financial stocks, which have been the main source of market weakness today. The Shanghai Composite(-41% from high) continues to display an inability to rally, notwithstanding recent strength in other emerging and developed markets. This is being mostly ignored in the financial press so far. Nikkei futures indicate a -86 open in Japan and DAX futures indicate an +80 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting.