Stocks Modestly Lower into Final Hour on Profit-taking after Fed "Pause"

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Retail longs and Computer longs. I covered my (IWM) and (QQQQ) hedges today, thus leaving the Portfolio 100% net long. The tone of the market is slightly negative as the advance/decline line is modestly lower, most sectors are falling and volume is above average. The Johnson Redbook same-store sales index rose 3.2% year over year last week vs. a 2.7% rise the prior week. The long-term average is a gain of around 2.8%. I still see little evidence that a significant decline in consumer spending is beginning, even as investors continue to price this into stocks. The back-to-school selling season will likely exceed lowered expectations. I still expect retail sales to stabilize around average levels over the intermediate term. The FOMC left rates unchanged. The ensuing policy statement was more dovish than expected. This is a significant surprise. So far, the market's reaction is mildly negative. I expect US stocks to trade higher into the close from current levels on short-covering, an end to the Fed rate hikes, lower energy prices and bargain-hunting.