Stocks Surging into Final Hour on Less Economic Fear, Diminishing Sovereign Debt Angst, Short-Covering, Technical Buying

Broad Market Tone:

• Advance/Decline Line: Substantially Higher
  
• Sector Performance: Almost Every Sector Rising
  
• Volume: Below Average
  
• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• VIX 23.90 -8.43%
  
• ISE Sentiment Index 106.0 +20.45%
  
• Total Put/Call 1.02 +10.87%
  
• NYSE Arms .50 -68.58%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 106.75 bps -2.72%
  
• European Financial Sector CDS Index 112.37 bps -4.21%
  
• Western Europe Sovereign Debt CDS Index 134.33 bps -3.98%
  
• Emerging Market CDS Index 224.12 bps -3.87%
  
• 2-Year Swap Spread 19.0 -1 bp
  
• TED Spread 20.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .15% unch.
  
• Yield Curve 213.0 +5 bps
  
• China Import Iron Ore Spot $148.40/Metric Tonne +.07%
  
• Citi US Economic Surprise Index -53.20 +4.1 points
  
• 10-Year TIPS Spread 1.62% unch.
  

Overseas Futures:

• Nikkei Futures: Indicating +95 open in Japan
• DAX Futures: Indicating -4 open in Germany

Portfolio:

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

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 is trading near session highs and is moving back above its 50-day moving average. On the positive side, Gaming, Ag, Oil Tanker, Coal, Defense, Road & Rail, Restaurant and REIT stocks are especially strong, rising 2.75%+. Small-Cap and cyclical shares are outperforming. The Libor-OIS and TED spreads continue to trend lower. The 10-year yield is climbing +7 bps to session highs at 2.64%. Copper is +1.8% higher on the day, while lumber is jumping ++3.57%. The European Investment Grade CDS Index is falling -3.33% to 103.91 bps, the Spain sovereign cds is falling -3.99% and the Ireland sovereign cds is declining -5.52% to 278.64 bps. On the negative side, Education, HMO, Bank and Disk Drive shares are underperforming. (XLF) has also underperformed throughout the day. Market volume remains anemic, which is also a negative. I suspect stocks will build further on today's rally before week's end. I expect US stocks to trade mixed-to-higher into the close from current levels on less economic fear, declining sovereign debt angst, short-covering, bargain-hunting and technical buying.