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Time to look around

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The major indexes remain pegged near unchanged levels and they've been stuck here for the better part of the morning.

We're seeing a slight "divergence" between equities and Treasuries today, and the rather impressive "bid" that stocks seem to find near unchanged levels despite some buying in Treasuries certainly has the look that bears are beginning to lose some confidence near-term as coalition forces close in around Baghdad.

Today's sideways type of trade has given me some time to answer some subscriber e-mail, and if traders think this market environment is "overly bullish" then you should look at the amount of e-mail from hungry bears looking to trade bearish. Several e-mails despite my best efforts are questions regarding if I think MMM or SLM are good short candidates.

No. I don't like to try and short stocks that are trading 52- week highs. While a bearish trader can "hit the lottery" if he's successful in picking a top, in my opinion, the odds of doing so are similar to that of winning the lottery. Personally, I play the Colorado Lottery or "Powerball" about once every two years and the JACKPOT had better be HUGE! I'm all for giving the state of Colorado some needed revenue dollars, but I try not to give the stock or options market any revenue by shorting strong stocks in a strengthening market.

While the major indexes are trading unchanged, we're starting to seem a pickup in buying in the technology sectors. Earlier this morning at the 11:00 AM EST mark, only the Computer Technology Index (XCI.X) 531.67 +1.49% was showing a gain of better-than 1% and just fractionally so at that hour, but we're now seeing the Biotechnology (BTK.X) 358 +1.79%, Software (GSO.X) 106.61 +1.13%, Semiconductor (SOX.X) 322 +1.26% and Internet (INX.X) 103.51 +1.75% begin to build some mid-day gains.

Gains for "computer-related" sectors are being spurred on by Dell Computer (NASDAQ:DELL) $29.08 +3.48% as the session progresses. Late yesterday, Dell reaffirmed Q1 guidance ahead of today analyst meeting in New York. On February 13, dell said it saw revenues growing 18% or higher, to $9.5 billion, and an increase in earnings per share of 35%, to $0.23 per share. While consensus is currently following this guidance, yesterday's "sneak peek" most likely brings in some short-covering in the stock and other computer-sensitive stocks.

Shares of semiconductor bellwether Intel (NASDAQ:INTC) $17.74 +1.3% has reversed a fractional loss from this morning and builds gains to its best levels of the session.

While some bears struggle with stocks trading at or near 52-week highs, bears in Dow component AT&T (NYSE:T) $15.07 are finding a new 52-week low in today's trade.

Morgan Stanley cut its view on the telecom industry to "cautious" from "in line," while several other brokerage firms trimmed their earnings forecast for 2003 and 2004 for the Baby Bells and long- distance telephone companies.

Shares of long-distance provider (NYSE:FON) $11.95 -3.93% may warrant some attention over the next couple of session as the stock slips back below its 200-day SMA of $12.05 and currently holds support at a trying to round-out 21-day SMA of $11.86.

While one of the weakest Dow components in AT&T (T) sees a new 52-week low, one of the strongest Dow components 3M (NYSE:MMM) $134.87 +0.9% is closing in on a 52-week high of $134.92 found on March 21. Yesterday, I mistakenly report a "bad tick" trade in 3M above the $135 level. Personally, I think I may have been a couple of days early on that report.

Jeff Bailey

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