Stocks Lower into Final Hour on Rise in Energy Prices, Profit-Taking

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Internet longs, Computer longs and Medical longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is slightly bearish as the advance/decline line is mildly lower, most sectors are declining and volume is about average. Investor anxiety is about average. Today’s overall market action is mildly bearish. The VIX is rising 3.8% and remains above average at 18.9. The ISE Sentiment Index is slightly below average at 138.0 and the total put/call is around average at .90. Finally, the NYSE Arms has been running around average most of the day and is currently 1.02. Given recent stock gains, a jump in oil to another record and technical resistance, today’s action isn’t too bad. The road & rail, homebuilding, construction, HMO, hospital, wireless, disk drive, computer hardware, software, steel and energy sectors are all flat-to-higher on the day. Moreover, many market-leading growth stocks are substantially outperforming the broad market, with some posting meaningful gains today. The TED spread is falling another 9 basis points today to 118.0 basis points, which is the lowest since February 27^th and down from 204.0 on March 19^th, which is a significant positive. Illumina Inc.(ILMN), one of my larger long positions, continues to trade very well and is poised to make a new closing high. I still see substantial upside in the shares from current levels over the long-term. (ISRG), another one of my larger long positions, is trading better of late and is still providing investors with an excellent entry point. Nikkei futures indicate an +120 open in Japan and DAX futures indicate an +35 open in Germany tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering and less economic pessimism.