Stocks Higher into Final Hour on Lower Energy Prices, Short-Covering, Bargain-Hunting

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Medical longs, Software longs, Internet longs, Computer longs and Gaming longs. I have not traded today, thus leaving the Portfolio 75% net long. The tone of the market is positive as the advance/decline line is higher, most sectors are rising and volume is about average. Investor anxiety is slightly below average. Today’s overall market action is mildly bullish. The VIX is falling 6.3% and remains above average at 21.03. The ISE Sentiment Index is above average at 176.0 and the total put/call is below average at 1.02. Finally, the NYSE Arms has been running below average most of the day and is currently .84. The Euro Financial Sector Credit Default Swap Index is plunging 16.2% today to 76.0 basis points. This is a large positive. This index is still up from a low of 52.66 on May 5^th, but down from 129.46 basis points on March 20^th. The North American Investment Grade Credit Default Swap Index is rising 2.78% today to 129.38. The TED spread is rising 3.0% to 1.00. The fact that oil is falling over $2/bbl. today despite mixed inventory data and a falling US dollar is a positive. I expect (RIMM) to exceed estimates after the close and give conservative guidance, which could pressure the shares given how much they have risen of late. I expect any related weakness in (AAPL) shares to be mild and temporary in nature. Nikkei futures indicate an +236 open in Japan and DAX futures indicate an +48 open in Germany tomorrow. I expect US stocks to trade modestly higher into the close from current levels on lower energy prices, short-covering and bargain-hunting.