Stocks Mostly Lower into Final Hour ahead of FOMC Meeting

BOTTOM LINE: The Portfolio is about even into the final hour as gains in my Internet longs and Medical longs are offsetting losses in my Retail longs and Computer longs. I added (IWM) and (QQQQ) shorts today, thus leaving the Portfolio 75% net long. The tone of the market is modestly negative as the advance/decline line is lower, sector performance is mostly negative and volume is average. I expect the Fed to raise the benchmark fed funds rate 25 basis points tomorrow to 5.0%. I do not expect it to say it is ready to pause. I do, however, expect members to say they will pause on signs of a slowdown in economic growth from recent robust rates. This may disappoint equity investors. Specifically, the most cyclical stocks that have seen parabolic moves of late on the hopes that the Fed was done may come under pressure. I expect US stocks to trade mixed-to-lower into the close from current levels on higher energy prices and profit-taking ahead of Wednesday’s FOMC meeting.