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Tight range with 10-year and Dow at weekly pivots

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The major indexes currently show fractional losses with the Dow Industrials (INDU) 8,163 -0.42% lower by 35 points and after slipping below its WEEKLY Pivot of 8,180 fell to a session low of 8,151 and recent rally attempts from those lows have found selling back near the 8,180 level and gives a defensive look to things.

The 10-year Treasury, which found fractional selling early this morning has now seen a slight bit come into the benchmark bond. In our pivot analysis matrix, we track the 10-year YIELD ($TNX.X) 3.90%, which moves inverse of price, and here too, we see the 10- year YIELD slipping back below its weekly pivot of 3.903%.

Current view is that there just isn't much cash moving around right now and this has stocks stuck in a rather tightly contested range.

On the "weaker" side of things in our WEEKLY pivot matrix, we've seen the NASDAQ-100 Index (NDX.X) 1,022 -0.13, which is lower by 1.34 points here, trade a morning low of 1,018.7, which is support at its WEEKLY S1 of 1,017.5 and our conventional 38.2% retracement from the October lows to December highs. This 1,018 was a key level of resistance from January to mid-March, but after being broken to the upside on March 13, has been a level of support on pullbacks.

Helping the NASDAQ-100 hold support at this point is morning strength from the CBOE Internet Index (INX.X) 101.77 +1.16%, and a fractional bid coming into the Semiconductor Index (SOX.X) 299.19 +0.21%. Shares of Yahoo! Inc. (NASDAQ:YHOO) $23.47 +2.62% has moved back above its shorter-term 21-day SMA after reporting earnings last night, while gains in semiconductor components Maxim Integrated (NASDAQ:MXIM) $35.81 +0.87%, Sandisk (NASDAQ:SNDK) $17.07 +0.76% and Linear Technology (NASDAQ:LLTC) $30.83 +0.91% offset weakness in bellwether's Intel (NASDAQ:INTC) $16.66 -0.09% and Applied Materials (NASDAQ:AMAT) $13.05 -0.3%.

The S&P Retail Index (RLX.X) 282.49 +0.06% trades relatively unchanged as multiple retailers report same store sales for March, and we begin to see quarterly earnings reports. Shares of Children's Palace (NASDAQ:PLCE) $13.01 +21% jumped higher after receiving an upgrade from Pacific Growth as PLCE reported an 11% decline in its March same-store sales, but was well above the firms estimates for a decline of 25%. That news had Pacific Growth readjusting its 2003 estimates and raising full-year estimates to $0.41 from $0.35 and 2004 estimates to $0.50 from $0.43.

As noted in this morning's market monitor, retailers have been expected to report weaker sales for March with "war with Iraq" lessoning consumer spending, and perhaps analysts have been overly cautious with their estimates. While PLCE is only one example and I'm not pointing fingers at Pacific Growth, tomorrow's retail sales numbers for March will be closely monitored by investors. I made note a couple of sessions ago that current consensus is for a 0.6% gain in retail sales, but I've seen some analysts skewed fairly significant either side of this average estimate. Recent sector action and gains for the index hint that upper-end forecasts of 1.1% (nearly double the average estimate) are being built into the group.

The broader S&P 500 Index (SPX.X) 863.63 -0.27% is currently off 2 points, while the narrower S&P 100 Index (OEX.X) 438.71 -0.41% sees a 1.86-point decline as it nears its 50% retracement from conventional retracement taken from its October lows to December highs, while slipping below its trending higher and shorter-term 21-day SMA of 440.70. I've set an "upside alert" at 442, which would be just above the WEEKLY pivot of 441.50 as an alert to any type of rally potential, but current action from the Dow Industrials at its WEEKLY pivot and a rather lackluster Treasury trade, stocks look to be stuck in a rut today.

Jeff Bailey

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