Stocks Lower into Final Hour on Profit-taking, Mixed FOMC Minute Comments

BOTTOM LINE: The Portfolio is slightly lower into the final hour on losses in my Telecom longs and Computer longs. 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, almost every sector is declining and volume is about average. The Shanghai Composite Index is now up 242% in less than two years. It is up 31% year to date. I continue to believe the bubble in Asian emerging markets remains the most serious threat to the U.S. bull market longer-term. Tractor Supply (TSCO) boosted guidance slightly this morning. I still think long-term estimates are too low and the stock is still cheap at current levels based on my expectations. I am long the stock. While the MBA mortgage applications report was slightly lower, purchase applications rose a healthy 2.7%. There was something for the hawks and the doves in the FOMC minutes. The 10-year yield is moving only 1 basis point higher and the U.S. dollar is rising only slightly on the report. However, stocks are moving to session lows. There was nothing in the minutes that would change my mind regarding my expectations of the Fed remaining on hold throughout the year. I expect economic growth to improve to more average levels and inflation to decelerate further later this year. I expect US stocks to trade modestly higher into the close on short-covering and bargain-hunting.