Stocks Lower into Final Hour on Rising Credit Market Angst, Global Growth Concerns

BOTTOM LINE: The Portfolio is slightly higher into the final hour on gains in my Medical longs and Semi longs. I covered my (IWM/QQQQ) hedges and them added them back today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, sector performance is mixed and volume is above average. Investor anxiety is slightly above average. Today’s overall market action is bearish. The VIX is falling 2.1% and remains above average at 22.80. The ISE Sentiment Index is below average at 115.0 and the total put/call is above average at 1.02. Finally, the NYSE Arms has been running low most of the day and is currently .44. The Euro Financial Sector Credit Default Swap Index is rising 5.0% today to 90.50 basis points. This is up from a low of 52.66 on May 5^th, but still down from 129.46 basis points on March 20^th. The North American Investment Grade Credit Default Swap Index is rising .04% today at 124.19. It appears as though there is quite a bit of short-covering going on today rather than bargain hunting. Energy-related stocks are notably weak considering oil is flat on the day. The gains in semi stocks are also noteworthy considering broad market weakness. The 10-year T-note will likely continue to rally until a meaningful reversal lower in oil is at hand. Nikkei futures indicate a -34 open in Japan and DAX futures indicate an +74 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on rising credit market angst, short-selling and global growth concerns.