Stocks Higher into Afternoon on Fiscal Cliff Hopes, Short-Covering, Seasonal Strength, Financial Sector Strength

Broad Market Tone:

• Advance/Decline Line: Slightly Lower
  
• Sector Performance: Mixed
  
• Volume: Below Average
• Market Leading Stocks: Underperforming

Equity Investor Angst:

• VIX 16.41 -4.15%
• ISE Sentiment Index 148.0 +85.0%
• Total Put/Call .86 -17.31%
• NYSE Arms .54 -48.75%

Credit Investor Angst:

• North American Investment Grade CDS Index 98.53 -1.83%
• European Financial Sector CDS Index 151.69 -.68%
• Western Europe Sovereign Debt CDS Index 104.63 bps +2.14%
• Emerging Market CDS Index 221.57 bps -1.5%
• 2-Year Swap Spread 11.75 -.25 bp
• TED Spread 22.0 unch.
• 3-Month EUR/USD Cross-Currency Basis Swap -24.25 +1 bp

Economic Gauges:

• 3-Month T-Bill Yield .09% unch.
• Yield Curve 135.0 -1 bp
• China Import Iron Ore Spot $117.90/Metric Tonne +.68%
• Citi US Economic Surprise Index 34.70 +1.7 points
• 10-Year TIPS Spread 2.45 +1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating +38 open in Japan
• DAX Futures: Indicating +21 open in Germany

Portfolio:

• Slightly Lower: On losses in my tech/retail sector longs and emerging markets shorts
• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges
• Market Exposure: Moved to 50% Net Long