Stocks Lower into Final Hour on Weakness in Commodity and Tech Shares

BOTTOM LINE: The Portfolio is lower into the final hour as losses in my Semi longs and Medical longs are more than offsetting gains in my Base Metal shorts and Energy-related shorts. I added to my (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 50% net long. The tone of the market is very negative as the advance/decline line is substantially lower, almost every sector is declining and volume is above average. The iShares MSCI Emerging Markets Index (EEM), which I am short, is down 15% in two weeks. The end of the emerging markets and commodities manias are currently resulting in pain for the broad market. But I continue to believe that U.S. stocks will be huge beneficiaries from this development over the intermediate-term as demand for U.S. assets increases, the U.S. dollar firms, consumer confidence rises, the negativity bubble deflates further, inflation worries subside and long-term interest rates remain relatively low. I expect US stocks to trade modestly higher into the close from current levels on short-covering, lower long-term rates and bargain hunting.