Stocks Rising into Final Hour on Declining Eurozone Debt Fear, Tech Sector Optimism, Less Financial Sector Pessimism, Short-Covering

Broad Market Tone:

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

Equity Investor Angst:

• VIX 15.46 -5.67%
  
• ISE Sentiment Index 147.0 -2.65%
  
• Total Put/Call .59 -18.06%
  
• NYSE Arms .52 -60.28%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 84.04 -.54%
  
• European Financial Sector CDS Index 159.0 bps -2.69%
  
• Western Europe Sovereign Debt CDS Index 193.17 bps -2.97%
  
• Emerging Market CDS Index 197.75 -1.75%
  
• 2-Year Swap Spread 22.0 -1 bp
  
• TED Spread 16.0 unch.
  

Economic Gauges:

• 3-Month T-Bill Yield .14% unch.
  
• Yield Curve 275.0 +2 bps
  
• China Import Iron Ore Spot $178.30/Metric Tonne +1.02%
  
• Citi US Economic Surprise Index +44.0 +3.8 points
  
• 10-Year TIPS Spread 2.34% -1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating +126 open in Japan
• DAX Futures: Indicating +25 open in Germany

Portfolio:

• Higher: On gains in my Medical, Ag, Tech, Biotech and Retail long positions
  
• Disclosed Trades: None
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is bullish as the S&P 500 trades near session highs, despite recent equity gains, China inflation fears, US muni worries and some disappointing economic data. On the positive side, Education, Gaming, Restaurant, Homebuilding, Construction, HMO, Bank, Networking, Semi, Computer, Internet, Oil Service and Energy shares are especially strong, rising more than 1.0%. The MS Tech Index has traded well throughout the day and (XLF) is strongly outperforming again. Copper is rising +1.28%. The 10-year yield is stable at 3.32%. The Citi US Economic Surprise Index is now at the highest level since Feb. 18th of last year. The Italy sovereign cds is falling -2.83% to 206.35 bps, the Greece sovereign cds is falling -4.21% to 939.75 bps, the Spain sovereign cds is falling -2.68% to 299.33 bps, the Portugal sovereign cds is declining -3.08% to 480.93 bps and the Belgium sovereign cds is falling -2.04% to 205.30 bps. The Western Europe Sovereign CDS Index is now -26 bps off its record high set on January 11. Gold continues to deteriorate technically, falling another -1.01%. On the negative side, Food, Oil Tanker, Alt Energy and Coal shares are under pressure, falling more than .5%. The Japan sovereign cds is rising +2.79% to 83.65 bps and the US Muni CDS Index is rising +5.14% to 226.22 bps. The Euro Financial Sector CDS Index is still trending higher. The broad market continues to trade well overall. Semi equipment stocks(TER, CYMI, NANO, NVLS, SANM, BRKS, KLAC, AMAT, VSEA, RTEC, UCTT) are exploding higher today on volume. As well, the semi ETF(SMH) is seeing huge call volume. The move higher in this group looks like it has legs as it has caught many analysts by surprise. I expect US stocks to trade modestly higher into the close from current levels on declining eurozone debt angst, tech sector optimism, less financial sector pessimism, buyout speculation, earnings optimism and short-covering.