Stocks Mostly Higher into Final Hour on Less Economic Pessimism,

BOTTOM LINE: The Portfolio is higher into the final hour on gains in my Technology 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 higher, most sectors are gaining and volume is about average. Investor anxiety is very high. Today’s overall market action is mildly bullish. The VIX is falling -3.24% and is high at 21.21. The ISE Sentiment Index is low at 98.0 and the total put/call is slightly above average at .90. Finally, the NYSE Arms has been running high most of the day, hitting 1.58 at its intraday peak, and is currently 1.41. The Euro Financial Sector Credit Default Swap Index is falling -2.69% to 73.15 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 -1.15% 101.72 basis points. This index is also well below its Dec. 5^th record high of 285.99. The TED spread is unch. at 22 basis points. The TED spread is now down 444 basis points since its all-time high of 463 basis points on October 10th. The 2-year swap spread is rising +4.68% to 34.94 basis points. The Libor-OIS spread is unch. at 11 basis points. The 10-year TIPS spread, a good gauge of inflation expectations, is unch. at 2.18%, which is down -47 basis points since July 7th. The 3-month T-Bill is yielding .04%, which is unch. today. Small-caps are outperforming today with the Russell 2000 rising +1.0%. Ag, Semi, Airline, Gold and Steel shares are especially strong, rising +1.5%. The bears have been unable to gain any traction from the morning slide and the S&P 500 is holding above technical support. Today’s action is indicative of another healthy consolidation day. One of my longs, (CREE), is hitting another new multi-year high today. While the shares are extended short-term, I don't think it is too late to purchase the stock on any pullback. Nikkei futures indicate an +85 open in Japan and DAX futures indicate a -2 open in Germany on tomorrow. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, technical buying, less economic fear, investment manager performance angst and seasonal strength.