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Two Ways To Play: S&P May Overcome Performance Anxiety


Strengthen your portfolio in good times and bad.

S&P 1650?

The top story in Bloomberg this morning, analysts at Deutsche Bank, Lehman Brothers, and UBS predict the S&P 500 index will have the best performance since 1982 during this year's second half.

The consensus according to a Bloomberg survey calls for a rise of 18% by next January. On the high end, DB chief strategists believes the S&P 500 index will end the year at 1,650 and Lehman's Ian Scott is predicting 1,630. The market fears earnings will collapse and interest rates will surge on inflation worries, and "neither is going to happen," Scott said. See Mr. Practical's take in How the Bubble Bursts.

From the Bull Pen: Could stocks rally without Goldman Sachs (GS)? Those bullish can play the upside, but near term sell-stops can be set below $170.

From the Bear Cave: The rallies will come but it doesn't mean we'll be in a bull market. Bears can choose to play the downside should a stock like American Eagle (AEO) crawl back towards the $16 level.

J.C. Penney Back To School

Back-to-school season is already nearing and J.C. Penney (JCP) has a strategy to gain more of the teenage market, according to Reuters. In an effort to appeal to a larger teen base, JCP will offer more styles with six new brands hitting stores as early as next week. "The style will appeal to the teens and the price will certainly work for the parents because we are affordable compared to the department and specialty stores," said chief marketing officer Mike Boylson. The back-to-school season is JCP's second-largest sales season next to Christmas. For a retail perspective, see a recent Five Things You Need To Know by Professor Kevin Depew.

From the Bull Pen: Bulls might see a better play in Wal-Mart (WMT) with the stock approaching $55 support. Sell-stops can be set below.

From the Bear Cave: Is the back-to-school, teenage strategy a new one? A rally towards the $40 strike is what the bears are looking for, and bears can play the downside should the stock get to that level.

For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.

Quick Check Around the World

Asian trading closed with the Hang Seng +2.28%, Nikkei +0.92%, Sensex +0.54%, Taiwan +1.56% and Shanghai +4.59%.

A glance towards Europe finds the CAC +0.73%, DAX +0.85%, FTSE +0.74%

As of 8:30 AM EST, S&P futures are trading +2 points to 1267, and Nasdaq futures are up +12.50 points to 1834.

A Look At Commodities

Commodities are lower. Crude oil is down -2.31 to 142.98. Gold is lower -11.40 to 924.10. Silver is off -0.395 to 17.890, and copper is down -12.30 to 384.00.

The dollar index is up +0.290 to 73.021.

No events on the radar today, but click here to see the full trading radar.

Have a great day!
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No positions in stocks mentioned.

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