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The Train Stain

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Trade to win... never trade "not to lose"

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Gotta get to Tulsa
First train we can ride
Got to settle one old score
And one small point of pride


(Grateful Dead)


It's a busy morning in Minyanville as the critters digest a plethora of data and the early pressure is on the sell-side.

The dollar continues it's monopoly peg quest as it's reversed almost a full percent (lower) in pre-market trading. Same store sales were mixed, meanwhile, with Wal-Mart (WMT:NYSE), Kohl's (KSS:NYSE) and May Stores (MAY:NYSE) below plan while Target (TGT:NYSE) and Gap (GPS:NYSE) seemed better. On the research front, Goldman Sachs reports that their mid-April IT spending survey indicated another leg down in 2003 spending intentions. The firm had expected to see signs of stabilization and instead saw the single largest move (lower) in their survey series. Finally, Europe is getting smoked like a Philly blunt at a Snoop Dogg concert.

We often discuss how bad news (that's not a disaster) is bullish in oversold tapes and good news (that's not great) is bearish in extended tapes. It could be argued that these latest data points (the tech spending survey and the aggregate retail sales data) are flat out NEGATIVE in an extended tape. If the war was the reason for "holding back," shouldn't there been discernable signs of an uptick? Just something to make you go "hmm" as we prepare to start our day.

The tale of the tape will be told by the willingness of traders to buy weakness. S&P 925 was trendline support (from the March lows) and, as we've breached it, all eyes will be on S&P 905. It's funny (not funny like a clown, but funny nonetheless) everybody and their gerbil wants to buy that level and conventional wisdom dictates that we'll pull back and zoom ahead. It's possible -- emotion and momentum make for a potent (toxic?) combination -- but let's worry about that when it arrives.

Keep an eye on the financials (particularly the brokers and BKX 800), Cisco (CSCO:Nasdaq) (sentiment), the retailers (reaction to numbers), the dollar (when does it matter?), breadth (internal health), the generals (General Motors (GM:NYSE) and General Electric (GE:NYSE)), semicaps and our levels. And please take a deep breath -- emotion remains the enemy while trading.

I enter the day with both legs in my metaphorical bear costume (50% conviction on the short side) and I wanna see how they act. It's been a long haul for Boo and I told him that the way to chip out of the woods is with a wedge, not a driver. Baby steps, Mon Bear, and you'll find Mr. Mojo rising.

Kick some arse.

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