Stocks Lower into Final Hour on Profit-taking, Higher Energy Prices

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Medical longs and Computer longs. I added (IWM)/(QQQQ) hedges and added to my (EEM) short this morning, thus leaving the Portfolio 75% net long. The overall tone of the market is mildly bearish as the advance/decline line is slightly lower, sector performance is mixed and volume is about average. Investor anxiety is above average. Today’s overall market action is neutral. The VIX is rising 3.3% and remains above average at 23.5. The ISE Sentiment Index is a low 98.0 and the total put/call is above average at 1.04. Finally, the NYSE Arms has been below average most of the day and is currently around average at 1.06. Overall, I would classify today's action as a healthy consolidation of recent gains. Many market leading stocks are higher on the day. Research In Motion(RIMM) reports after the close. I don’t have a position in this stock, however it could see some mild weakness even on an anticipated positive report given other technical factors, which could lead to some broad market weakness early tomorrow. As well, Bernake and Paulson’s testimony tomorrow and jitters ahead of Friday’s jobs report could pressure stocks mildly on the open. Nikkei futures indicate an +65 open in Japan and DAX futures indicate an +53 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on profit-taking and higher energy prices.