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Unchanged

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The morning trade has been mixed with the major indexes now hovering at unchanged levels.

On Tuesday, bullish traders swallowed a weaker than expected reading from the March ISM Index and pushed stocks higher into yesterday's close, and bulls got a second round of weak data from the March ISM Services data, which showed contraction in the non- manufacturing sector after 13-months of expansion. The ISM non- manufacturing index fell to 47.9% in March, which was down from February's 53.9% reading. Economists were forecasting a March reading of 52.5%. Levels above 50% depict growth, while readings below 50% signal contraction.

While the major market averages show mixed to unchanged trade with the Dow Industrials (INDU) 8,294 gaining 9 points, the S&P 500 (SPX.X) 880.83 (unch), S&P 100 (OEX.X) 447 (unch) and NASDAQ- 100 (NDX.X) 1,069 gaining 6 points, Treasuries are now starting to see a mixed trade with some selling coming in on the longer- date 30-year Treasury as YIELD ($TYX.X) rises fractionally to 4.924%.

The 10-year June futures contract (ty03m) $114'060 is higher by 3/32, with the benchmark bond's YIELD ($TYX.X) fractionally lower at 3.921%.

As economists poor over this morning's release of a weaker than expected jobless claims number, some are noting that the weekly surge in jobless claims was partially attributed to weather in the Rocky Mountain States as a heavy spring snow had many businesses closed for a two-day period and job hunters were homebound for nearly three days while trying to dig out from under snow.

Sector action is mixed with Oil Service (OSX.X) 84.73 -1.62%, Dow Transports (TRAN) 2,190 -1% and North American Telecom (XTC.X) 423.50 -1% the only sectors I see with 1% declines or greater.

Sector gainers have the Computer Technology Index (XCI.X) 529 +1% as the only sector/index marking a 1% gain or better as bulls received a lift from Dell Computer (NASDAQ:DELL) $28.79 +2.52% after the company told investors it would reaffirm its first- quarter revenue and earnings forecast at its spring analyst meeting today in New York.

While I don't select many of the OI Call/Put play profiles, I was browsing today's "play of the day" in Whole Foods Market (NASDAQ:WFMI) $55.97 -3.46%. I've done a couple of things with this stock's bar chart and I would personally prefer to monitor the stock today, and look for the stock to "firm" up at around the $55 mark and rising 21-day SMA and look for PULL BACK ENTRY between $55 and $52. I see a "reverse head/shoulder" pattern that I'm not sure was outlined in the play (neckline at $52.23), that would have a bullish objective of $59. I think today's ISM Services data helps attribute to weakness (this is a higher-end food retailer) and with some traders perhaps playing a target $59, I would prefer entry on pullback that at $57.50. This is NOT a critique of the play, but my "reasoning" for today's pullback.

I also checked the point/figure chart of WFMI and it is bullish with a longer-term vertical count of $85 (plenty of upside), which would be negated with a trade at $54. Trend has been bullish since 2001. According to Dorsey/Wright and Associates, the stock is classified as a "retailing" stock and the sector bullish percent (bpreta) recently reversed back up into "bull confirmed" status at 34% on March 21. As a benchmark, WFMI closed at $57.85 on March 21. This observation is the MAJOR reason I think that there are some bulls from the neckline break higher at $52.25 probably selling this morning's ISM Service data and lack of selling in Treasuries if they were playing a target of $59.

Jeff Bailey

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