Stocks Higher into Final Hour on Lower Long-Term Rates, Earnings Optimism, Short-Covering, Homebuilding/REIT Sector Strength

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Broad Equity Market Tone:

• Advance/Decline Line: Substantially Higher
  

• Sector Performance: Almost Every Sector Rising
  

• Volume: Light

• Market Leading Stocks: Performing In Line

Equity Investor Angst:

• Volatility(VIX) 14.95 -.99%

• Euro/Yen Carry Return Index 136.06 +.29%

• Emerging Markets Currency Volatility(VXY) 10.27 -1.53%

• S&P 500 Implied Correlation 52.03 -.25%

• ISE Sentiment Index 118.0 +11.32%

• Total Put/Call .90 -1.10%

• NYSE Arms 1.11 -15.65% 

Credit Investor Angst:

• North American Investment Grade CDS Index 82.26 -2.37%

• European Financial Sector CDS Index 146.25 +.46%

• Western Europe Sovereign Debt CDS Index 83.50 +1.83%

• Emerging Market CDS Index 326.19 -1.40%

• 2-Year Swap Spread 18.75 -.5 bp

• TED Spread 22.75 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -9.25 -.25 bp

Economic Gauges:

• 3-Month T-Bill Yield .04% unch.

• Yield Curve 247.0 -5 bps

• China Import Iron Ore Spot $139.0/Metric Tonne -.14%

• Citi US Economic Surprise Index 34.20 -.9 point

• Citi Emerging Markets Economic Surprise Index -31.50 -4.4 points

• 10-Year TIPS Spread 2.17 +3 bps

Overseas Futures:

• Nikkei Futures: Indicating +19 open in Japan

• DAX Futures: Indicating -3 open in Germany

Portfolio: 

• Slightly Higher: On gains in my biotech/retail sector longs and emerging markets shorts

• Disclosed Trades: Covered some of my (IWM)/(QQQ) hedges, then added them back

• Market Exposure: 25% Net Long