Stocks Reversing Modestly Higher into Final Hour on Fiscal Cliff Optimism, Short-Covering, Bargain-Hunting, Option Expiration

Today's Market Take:

Broad Market Tone:

• Advance/Decline Line: Lower
  
• Sector Performance: Most Sectors Declining
• Volume: Slightly Above Average
• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• VIX 17.55 -2.22%
• ISE Sentiment Index 99.0 +6.4%
• Total Put/Call 1.05 -15.32%
• NYSE Arms 1.81 +161.53%

Credit Investor Angst:

• North American Investment Grade CDS Index 110.30 bps -.95%
• European Financial Sector CDS Index 186.90 bps +.01%
• Western Europe Sovereign Debt CDS Index 125.17 bps +7.46%
• Emerging Market CDS Index 252.09 bps +.88%
• 2-Year Swap Spread 14.25 +.75 basis point
• TED Spread 23.5 unch.
• 3-Month EUR/USD Cross-Currency Basis Swap -30.25 -1.0 basis point

Economic Gauges:

• 3-Month T-Bill Yield .08% unch.
• Yield Curve 134.0 +1 basis point
• China Import Iron Ore Spot $122.80/Metric Tonne unch.
• Citi US Economic Surprise Index 47.50 -3.2 points
• 10-Year TIPS Spread 2.38 +1 basis point
  

Overseas Futures:

• Nikkei Futures: Indicating +27 open in Japan
• DAX Futures: Indicating +29 open in Germany

Portfolio:

• Higher: On gains in my Tech/Medical/Biotech sector longs and Emerging Markets shorts
• Disclosed Trades: Covered some of my (IWM), (QQQ) hedges
• Market Exposure: Moved to 50% Net Long