Stocks Mostly Lower into Final Hour on Profit-taking

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Medical longs, Networking longs and Biotech longs. I added to my (ISRG) and (BBY) longs and to my (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 75% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are falling and volume is above average. The AAII percentage of Bulls rose to 34.88% this week from 23.85% the prior week. This reading is still at below average levels. The AAII percentage of Bears fell to 43.02% this week from 57.80% the prior week. This reading is still at above average levels. Moreover, the 10-week moving average of the % Bears is 46.04%. The 10-week moving-average of % Bears has been this high only 1 other time since record-keeping began in 1987, the significant market bottom during the 1990 recession and Gulf War. It never even reached current levels during the depths of one of the greatest stock market collapses in US history during 2002. I continue to believe overall investor sentiment toward U.S. stocks remains at levels associated with meaningful market bottoms. I expect US stocks to trade modestly higher into the close from current levels on short-covering, mostly positive earnings reports and bargain-hunting.