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Not feeling so Homey on the range


Doesn't this market feel awful? War with Iraq seems imminent, the profit picture is mixed and a number of technical levels have been broken. This sounds like an environment where buying would seem insane. Or would it?

Technical levels haven't mattered for the last two months (just look at the number of headfakes over that period), a military solution to Iraq shouldn't come as a surprise, and the mixed earnings reports and guidance has been this way for the last two quarters.

The bottom line is that the tape feels as bad right now as it did great two weeks ago when it was "obviously" breaking out. The toughest aspect of a trading range environment is to have the courage of conviction when it looks like a break down is imminent and discipline of conviction when it looks like it is off to the races to the upside.

There are so many issues facing the tape that any big bets don't make much sense, but if the market is in a trading range, this isn't the point to be an aggressive seller. Tough call - kinda like the one looking for a move back to the lower end of the trading range a couple weeks ago when the performance chasers were taking stocks higher.
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To understand discipline, go back and read Toddo's journal from yesterday!
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