Stocks Higher into Final Hour on Less Earnings Pessimism, US Dollar Strength, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Computer longs and Software longs. I have not traded today, thus leaving the Portfolio 75% net long. The overall tone of the market is mildly bullish as the advance/decline line is slightly higher, most sectors are rising and volume is about average. Investor anxiety is about average. Today’s overall market action is bullish. The VIX is falling 3.6% and remains above average at 20.1. The ISE Sentiment Index is about average at 151.0 and the total put/call is about average at .93. Finally, the NYSE Arms has been running above average most of the day and is currently 1.29. Considering the declines in (ABK) and (MBI), the mild .6% decline in the (XLF) is a huge positive. While I think it is very likely that most financials have seen their lows, I suspect the group will be mired in a trading range over the intermediate-term. Growth stocks are substantially outperforming value shares again, with tech and healthcare equities especially strong. One of my longs, Illumina(ILMN), hit a new high today, rising 11%, after reporting stellar 1Q results. The stock is a bit extended short-term, but should move substantially higher over the intermediate to long-term. While the much loved and hyped fertilizer stocks may have further to go in the short-run, this bubble is growing unwieldy and will likely pop over the next few months. Nikkei futures indicate an +106 open in Japan and DAX futures indicate an +42 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, US dollar strength, less earnings pessimism and bargain-hunting.