Stocks Jumping on Less Economic Fear, Diminishing Healthcare Reform Worries, Technical Buying, Short-Covering

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology longs, Gaming longs, Financial longs, Medical longs and Biotech longs. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is positive as the advance/decline line is substantially higher, almost every sector is rising and volume is above average. Investor anxiety is high. Today’s overall market action is bullish. The VIX is falling 4.44% and is high at 24.56. The ISE Sentiment Index is below average at 122.0 and the total put/call is slightly below average at .71. Finally, the NYSE Arms has been running below average most of the day, hitting .53 at its intraday trough, and is currently .90. The Euro Financial Sector Credit Default Swap Index is falling .44% today to 80.31 basis points. This index is down from its record March 10th high of 208.75. The North American Investment Grade Credit Default Swap Index is falling 3.77% to 106.81 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is falling 1.72% to 29 basis points. The TED spread is now down 437 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising 5.77% to 47.0 basis points. The Libor-OIS spread is falling 1.55% to 26 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is up 10 basis points to 2.0%, which is down 66 basis points since July 7th. The 3-month T-Bill is yielding .17%, which is unch. today. Cyclical and Small-cap shares are substantially outperforming the averages today on the better-than-expected jobs report. The transports are blasting 4.2% higher. US dollar strength in the face of this report is a big positive and may indicate another change in trend. On the negative side, the Semis are lower on the day and select market leaders are displaying relative weakness. As well, I am hearing rising worries over the true state of China’s economy. Nikkei futures indicate an +288 open in Japan and DAX futures indicate a -5 open in Germany on Monday. I expect US stocks to trade mixed-to-lower into the close from current levels on profit-taking, more shorting, China worries and rising long-term rates.