DJIA Hits Another Record High After Fed Comments

Indices
S&P 500 1,512.58 +.32%
DJIA 13,362.87 +.40%
NASDAQ 2,576.34 +.18%
Russell 2000 834.77 +.47%
Wilshire 5000 15,230.32 +.38%
Russell 1000 Growth 596.84 +.35%
Russell 1000 Value 870.40 +.37%
Morgan Stanley Consumer 743.58 +.28%
Morgan Stanley Cyclical 1,055.12 +.56%
Morgan Stanley Technology 610.69 +.37%
Transports 5,215.49 -.05%
Utilities 529.52 +.26%
MSCI Emerging Markets 125.76 +1.08%

Sentiment/Internals
Total Put/Call .73 -26.26%
NYSE Arms .83 -20.06%
Volatility(VIX) 12.88 -2.50%
ISE Sentiment 164.0 +32.26%

Futures Spot Prices
Crude Oil 61.57 -1.11%
Reformulated Gasoline 224.52 +1.85%
Natural Gas 7.73 +1.26%
Heating Oil 182.07 -.50%
Gold 682.80 -.67%
Base Metals 283.77 +.52%
Copper 366.25 -1.61%

Economy
10-year US Treasury Yield 4.66% +3 basis points
US Dollar 82.0 +.08%
CRB Index 308.68 -.07%

Leading Sectors
Steel +1.87%
Semis +1.8%
Retail +1.34%

Lagging Sectors
Oil Tankers -.16%
Drugs -.18%
Internet -1.34%

Evening Review
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Afternoon Recommendations
Deutsche Bank:
- Rated (SLAB), (XLNX), (MRVL), (TSRA) and (NETL) Buy.

Afternoon/Evening Headlines
Bloomberg:
- Edison Intl.(EIX) said it plans to more than triple its wind-power production capacity within two years, an investment that may to $2 billion.
- Crude oil in NY fell to the lowest in seven weeks in NY after an EIA report showed inventories surged near eight-year highs and gasoline supplies rose more than expected even as refinery utilization rose less than expected.
- Sugarcane production in Brazil, the world’s largest grower, will soar 54% in the next five years as global demand increases for crop-based fuels, said the head of Brazil’s largest sugar and ethanol group.
- Alltel Corp.(AT) is in talks with three competing buyout groups including one that pairs the Carlyle Group with Kohlberg Kravis Roberts.
- Whole Foods Market(WFMI) reported second-quarter profit that fell more than expected on costs to open new stores and competition from traditional grocers. The shares fell 9% in after-hours trading.
- Vice-President Dick Cheney said he was “impressed” by the commitment of Iraqi leaders to move forward on measures to speed political reconciliation in their nation after conferring with them in Baghdad today.
- WebSideStory(WSSI), a provider of Web site analytics, increased its full-year forecast. The stock soared 21% in after-hours trading.

Dow Jones:
- Atticus Capital LLC, one the largest shareholders of Deutsche Boerse AG, said the German exchange’s plan to purchase International Securities Exchange(ISE) will hurt investors.

CNBC:
- Bill Gross, manager of the world’s biggest fixed-income fund, told CNBC that he prefers short-maturity notes because the Fed will lower interest rates to support economic growth.

BOTTOM LINE: The Portfolio finished higher today on gains in my Computer longs, Networking longs, Semi longs, Retail longs and I-Banking longs. I didn’t trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was positive today as the advance/decline line finished modestly higher, most sectors rose and volume was above-average. Measures of investor anxiety were slightly below-average into the close. Today's overall market action was bullish as the major averages and breadth finished near session highs. The broad market outperformed the S&P 500. Retail, REITs, Engineering/Construction, Semis, Homebuilders, Wireless, Steel and Coal all saw very good gains today. The U.S. Dollar Index finished at session highs and the 10-year yield rose 3 basis points as the FOMC statement implied faster U.S. economic growth going forward. I suspect many anticipated a Fed news sell-off before the upcoming retail sales data, which likely left more traders leaning the wrong way. Back in February, I pointed out that heavily shorted Mohawk Industries (MHK) was exploding higher despite lowering forward guidance meaningfully. This should have been a huge red flag to the shorts, yet short interest has only grown since then, from around 10% of the float to 13%. The stock surged 3.5% today on heavy volume to an all-time high on private equity chatter. I want to reiterate how amazing this is considering what has transpired in housing and how disturbing it should be to the many "U.S. housing collapse will lead to a market collapse" bears. This is just more evidence of the severe complacency in the bear camp, in my opinion.