Stocks Lower into Final Hour on Rising Apprehension ahead of Fed Meeting and Higher Energy Prices

BOTTOM LINE: The Portfolio is lower into the final hour on losses in my Medical longs, Computer longs and Commodity shorts. I have not traded today, thus leaving the Portfolio 100% net long. The tone of the market is negative as the advance/decline line is lower, most sectors are falling and volume is below average. The S&P Case-Shiller Housing Composite futures point to a 5.1% decline in the average home price by May 2007 from current levels. I would hardly classify this as a hard landing, considering how much the median home price is up over the last decade. I expect a stabilizing housing market will be another catalyst for higher stock prices over the intermediate-term. I expect US stocks to trade modestly higher into the close from current levels on short-covering and bargain-hunting ahead of tomorrow’s Fed announcement.