Stocks Sharply Lower into Final Hour on Soaring Commodities, Global Growth Worries

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Computer longs, Software longs and Medical longs. I added to my (IWM)/(QQQQ) hedges this morning, thus leaving the Portfolio 50% net long. The tone of the market is very bearish as the advance/decline line is substantially lower, almost every sector is declining and volume is about average. Investor anxiety is above average. Today’s overall market action is very bearish. The VIX is rising 1.7% and remains above average at 23.64. The ISE Sentiment Index is depressed at 73.0 and the total put/call is above average at 1.09. Finally, the NYSE Arms has been running about average most of the day and is currently .95. The commodity bubble is once again pressuring the financials and sucking the life out of the broad US stock market. Every move higher in commodities from current levels pours more air into the current “US negativity bubble” and raises the odds for a severe global slowdown/contraction. The Transports, which had been market leaders, are under significant pressure today. The Euro Financial Sector Credit Default Swap Index is rising another 1.9% today to 83.40 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 TED spread is also rising 8.1% to .84 basis points. On the positive side, weekly retail sales rose 2.1% over the last week, up from a 1.8% gain the prior week, which is the best showing since the week ended Dec. 4 during the holiday shopping season. Nikkei futures indicate a -170 open in Japan and DAX futures indicate an +8 open in Germany tomorrow. I expect US stocks to trade mixed-to-lower into the close from current levels on soaring commodity prices, rising global growth worries and more record shorting.