Stocks Moving to Session Highs into Final Hour on Less Sovereign Debt Angst, Short-Covering, Lower Oil

Broad Market Tone:

• Advance/Decline Line: Slightly Higher
  
• Sector Performance: Most Sectors Rising
  
• Volume: About Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 16.44 -.24%
  
• ISE Sentiment Index 174.0 +8.75%
  
• Total Put/Call .68 -11.69%
  
• NYSE Arms .82 +29.41%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 85.73 bps -2.19%
  
• European Financial Sector CDS Index 78.93 bps -5.67%
  
• Western Europe Sovereign Debt CDS Index 83.58 bps -2.43%
  
• Emerging Market CDS Index 217.57 bps -.53%
  
• 2-Year Swap Spread 14.0 bps unch.
  
• TED Spread 15.0 +1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .15% - 1bp
  
• Yield Curve 282.0 bps -1 bp
  
• China Import Iron Ore Spot $166.20/Metric Tonne unch.
  
• Citi US Economic Surprise Index +42.20 +.1 point
  
• 10-Year TIPS Spread 2.34% unch.
  

Overseas Futures:

• Nikkei Futures: Indicating +81 open in Japan
• DAX Futures: Indicating -2 open in Germany

Portfolio:

• Higher: On gains in my Biotech, Medical and Tech long positions
  
• Disclosed Trades: Covered all (IWM)/(QQQQ) hedges and some of my (EEM) short
  
• Market Exposure: Moved to 100% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish as stocks trade near session highs on declining sovereign debt angst and falling oil. On the positive side, REIT, Construction, Computer and Oil Tanker stocks are especially strong, rising +1.0%+. (IYR) has traded well throughout the day. CDS indices are down across the board, which is a large positive. Oil is lower despite a jump in the euro, rising tensions with Iran and declining economic fear. Oil tanker rates have surged 19.05% over the last five days. A benchmark DRAM price is also jumping 5% higher today, which breaks it out of a multi-month range. On the negative side, HMO shares are under meaningful pressure, falling 1.0%+. (XLF) has lagged today. Investor angst remains relatively low and breadth is subpar. One of my longs, (CREE), is rising 3.5% today to another new all-time high. I would still be a buyer of the shares on any market-related pullback from current levels. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, lower energy prices, declining sovereign debt angst, investment manager performance anxiety and less economic fear.