Stocks Rising into Final Hour on Less Eurozone Debt Angst, US Debt Ceiling Optimism, Tech Sector Strength, Bargain-Hunting

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 19.19 -8.4%
  
• ISE Sentiment Index 117.0 +8.33%
  
• Total Put/Call .71 -25.26%
  
• NYSE Arms .69 -63.28%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 97.49 -1.77%
  
• European Financial Sector CDS Index 167.63 -3.14%
  
• Western Europe Sovereign Debt CDS Index 301.17 -.33%
  
• Emerging Market CDS Index 221.53 -1.81%
  
• 2-Year Swap Spread 29.0 unch.
  
• TED Spread 23.0 -1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .02% +2 bps
  
• Yield Curve 251.0 -4 bps
  
• China Import Iron Ore Spot $174.40/Metric Tonne unch.
  
• Citi US Economic Surprise Index -94.70 +3.3 points
  
• 10-Year TIPS Spread 2.32% -1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating +131 open in Japan
• DAX Futures: Indicating +50 open in Germany

Portfolio:

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

BOTTOM LINE: Today's overall market action is very bullish as the S&P 500 breaks back above its 50-day moving average to session highs despite eurozone debt angst, US debt ceiling concerns, emerging markets inflation fears, global growth worries, rising energy prices and a lagging financial sector. On the positive side, Education, Homebuilding, Networking, Disk Drive, Computer, Software, Oil Service, Alt Energy, Internet, Semi and Gaming shares are especially strong, rising more than +2.25%. "Growth" stocks are outperforming "value" again. Small-caps are also relatively strong. Copper is rising +1.45%, lumber is rising +1.9% and gold is falling -1.42%. Weekly retail sales rose +4.6% this week versus a +5.4% gain the prior week. The France sovereign cds is dropping -7.3% to 114.29 bps, the Spain sovereign cds is down -7.26% to 353.90 bps, the Italy sovereign cds is down -6.25% to 301.86 bps, the Belgium sovereign cds is falling -6.62% to 201.74 bps and the UK sovereign cds is declining -6.3% to 73.11 bps. On the negative side, Oil Tanker and Airline shares are down to slightly higher on the day. (XLF) has underperformed throughout the day. The Transports are underperforming again. Oil is rising +1.86%. Rice is hovering near a multi-year high and has soared almost +29.0% in about 2 weeks. The US price for a gallon of gas is unch. today at $3.68/gallon. It is up .54/gallon in less than 5 months. The Hungary sovereign cds is rising +4.79% to 303.43 bps. The Western Europe Sovereign CDS Index is hovering near its record high. Many true "growth" stocks continue to massively outperform the broad market. I continue to believe the European debt debt situation must calm significantly for US stocks to gain meaningful upside traction from current levels. One of my longs, (AAPL) reports after the close. I will view any initial kneejerk "sell the news" reaction on conservative guidance as another buying opportunity. I still see substantial upside to the shares from current levels longer-term on p/e multiple expansion, enterprise market penetration and new products. I expect US stocks to trade mixed-to-higher into the close from current levels on less eurozone debt angst, US debt ceiling optimism, tech sector strength, short-covering, bargain-hunting and technical buying.