Stocks Higher into Final Hour on Less Financial Sector Pessimism, Diminishing Eurozone Debt Angst, Seasonal Strength, Short-Covering

Broad Market Tone:

• Advance/Decline Line: Higher
  
• Sector Performance: Most Rising
  
• Volume: Slightly Below Average
  
• Market Leading Stocks: Performing In Line
  

Equity Investor Angst:

• VIX 17.98 -7.27%
  
• ISE Sentiment Index 126.0 -31.15%
  
• Total Put/Call .75 +8.70%
  
• NYSE Arms .90 +109.31%
  

Credit Investor Angst:

• North American Investment Grade CDS Index 92.84 bps +.01%
  
• European Financial Sector CDS Index 129.28 bps +5.17%
  
• Western Europe Sovereign Debt CDS Index 177.50 bps -1.84%
  
• Emerging Market CDS Index 210.70 bps -4.09%
  
• 2-Year Swap Spread 23.0 -2 bps
  
• TED Spread 17.0 +1 bp
  

Economic Gauges:

• 3-Month T-Bill Yield .13% -2 bps
  
• Yield Curve 253.0 +8 bp
  
• China Import Iron Ore Spot $167.80/Metric Tonne unch.
  
• Citi US Economic Surprise Index -9.60 -30.2 points
  
• 10-Year TIPS Spread 2.20% +1 bp
  

Overseas Futures:

• Nikkei Futures: Indicating -8 open in Japan
• DAX Futures: Indicating +12 open in Germany

Portfolio:

• Higher: On gains in my Biotech, Medical, Ag and Technology long positions
  
• Disclosed Trades: None
  
• Market Exposure: 100% Net Long

BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades near session highs despite a disappointing jobs report and recent gains. On the positive side, Education, Road & Rail, Gaming, Semi, Software, Gold, Ag, Oil Service, Alt Energy and Coal shares are especially strong, rising more than 1.0%. Cyclical and Small-Cap shares are outperforming. (XLF), which opened on the weak side, is heading into positive territory now. The Transports continue to trade well. Copper is rising +.35% and the S&P GSCI Ag Spot Index is jumping +3.19%. The Italy sovereign cds is dropping -2.89% to 211.23 bps, the Portugal sovereign cds is falling -3.91% to 425.45 bps and the UK sovereign cds is falling -8.43% to 67.56 bps. Moreover, the US Muni CDS Index is dropping -3.4% to 182.57 bps. On the negative side, Retail shares are under mild pressure. Today's overall market action is more positive than the major averages would suggest as I continue to see a number of small/mid-cap stocks experiencing technical breakouts on decent volume. I expect US stocks to trade mixed-to-higher into the close from current levels on falling eurozone sovereign debt angst, seasonal strength, investment manager performance angst, short-covering, less financial sector pessimism and technical buying.