Stocks Slightly Higher into Final Hour on Tech Sector Strength, Less Economic Fear, Tax Policy/Election Optimism, Short-Covering

Broad Market Tone:

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

Equity Investor Angst:

• VIX 18.95 -1.66%
  
• ISE Sentiment Index 141.0 +30.56%
  
• Total Put/Call .88 -7.37%
  
• NYSE Arms 1.06 -9.38%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 96.76 bps +.57%
  
• European Financial Sector CDS Index 96.33 bps +.30%
  
• Western Europe Sovereign Debt CDS Index 138.92 bps +.86%
  
• Emerging Market CDS Index 208.45 bps -1.09%
  
• 2-Year Swap Spread 17.0 -1bp
  
• TED Spread 17.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .12% unch.
  
• Yield Curve 221.0 +8 bps
  
• China Import Iron Ore Spot $151.80/Metric Tonne unch.
  
• Citi US Economic Surprise Index -4.70 +.2 point
  
• 10-Year TIPS Spread 2.13% +2 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +30 open in Japan
• DAX Futures: Indicating +18 open in Germany

Portfolio:

• Higher: On gains in my Tech, Medical, Biotech and Retail long positions
  
• Disclosed Trades: Covered all of my (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 the S&P 500 consolidates recent gains on light volume. On the positive side, Oil Service, Internet, Software, Semi, Disk Drive, Networking, Hospital, HMO, Restaurant, Gaming and Education shares are especially strong, rising 1.0%+. Small-caps are outperforming. Tech shares are trading very well with the MS Tech Index up +1.1%. "Growth" shares are also strongly outperforming "value" shares. The 10-year yield is rising +1 bp to 2.55%. Copper is rising +.61%. (BAC) shares are stabilizing. On the negative side, Utility, Telecom, Homebuilding, Drug and Coal shares are under mild pressure, falling more than .5%. The Greece sovereign cds is rising +3.19% to 695.07 bps and the Ireland sovereign cds is rising +3.58% to 421.52 bps. US scrap steel prices have declined -5.9% over the last 5 days. The broad market continues to display resiliency with select small/mid-cap growth stocks massively outperforming. A number of restaurant stocks(CMG, CAKE, PFCB, BWLD, PNRA, DRI, BJRI) are exploding higher on volume. Semis are leading tech today and look poised to break higher out of their 6-month trading range. I expect US stocks to trade mixed-to-higher into the close from current levels on tax policy/election optimism, tech sector strength, less economic fear, short-covering, buyout speculation and earnings optimism.