Stocks Rising into Final Hour on More Economic Optimism, Short-Covering, Technical Buying, Less Eurozone Debt Fear

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Most Sectors Rising
  
• Volume: Around Average
  
• Market Leading Stocks: Outperforming
  

Equity Investor Angst:

• VIX 15.81 +2.26%
  
• ISE Sentiment Index 186.0 +31.91%
  
• Total Put/Call .72 +26.32%
  
• NYSE Arms 1.60 +209.77%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 83.26 -.28%
  
• European Financial Sector CDS Index 160.0 bps +.59%
  
• Western Europe Sovereign Debt CDS Index 191.50 bps -.69%
  
• Emerging Market CDS Index 197.42 -.51%
  
• 2-Year Swap Spread 23.0 +1 bp
  
• TED Spread 16.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .14% unch.
  
• Yield Curve 277.0 +2 bps
  
• China Import Iron Ore Spot $181.40/Metric Tonne +.33%
  
• Citi US Economic Surprise Index +48.20 +4.2 points
  
• 10-Year TIPS Spread 2.38% +4 bps
  

Overseas Futures:

• Nikkei Futures: Indicating +77 open in Japan
• DAX Futures: Indicating +8 open in Germany

Portfolio:

• Higher: On gains in my Medical, Ag, Tech, Biotech and Retail long positions
  
• Disclosed Trades: Added to (AAPL) long, took profits in another long
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades slightly higher, despite recent equity gains, China inflation fears, US muni worries, disappointing (C) results and a pullback in (AAPL). On the positive side, Education, Restaurant, Construction, Biotech, Medical, Internet, Ag, Alt Energy and Defense shares are especially strong, rising more than 1.0%. (IYR) has outperformed throughout the day. The Nasdaq's resilience is impressive considering the (AAPL) decline. Copper is rising +.28%. The 10-year yield is stable at 3.35%. The Citi US Economic Surprise Index is now at the highest level since Feb. 9th of last year. The Italy sovereign cds is falling -1.74% to 205.73 bps and the UK sovereign cds is falling -7.46% to 66.71 bps. The Western Europe Sovereign CDS Index is now -28 bps off its record high set on January 11. A key benchmark for DRAM pricing, which has been in a downtrend, is surging +28.6% today. On the negative side, Airline, Tobacco and Bank shares are under meaningful pressure, falling more than 1.0%. The Japan sovereign cds is rising another +1.29% to 85.55 bps and the Emerging Markets Sovereign CDS Index is gaining +2.4% to 192.33 bps. Moreover, the US sovereign cds is jumping +18.6% today and has risen 4.41% over the last five days to 52.23 bps. The broad market continues to trade very well overall given recent headwinds. One of my longs, (GOOG) is hitting a new multi-year high today on above-average volume. I still see meaningful upside in the shares from current levels and the stock remains one of my core holdings in the tech sector. (AAPL) reports after the close today. I would use any short-term meaningful weakness related to further Jobs' angst, traditionally conservative guidance, profit-taking and new shorting to add to my long position. I still see significant upside in (AAPL) shares from current levels. I expect US stocks to trade modestly higher into the close from current levels on more economic optimism, technical buying, buyout speculation, diminishing eurozone debt fear, earnings optimism and short-covering.