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Market Wrap
(Briefing):

Once again, investors were reminded why the start of the week often carries the moniker of "Merger Monday"... The headline deal of note was IAC/InterActive Corp.'s (IACI 21.63, -0.66) $1.85 bln purchase of AskJeeves (ASKJ 28.67, +4.43), followed by Avid Technologies' (AVID 56.61, -6.34) $462 mln acquisition of Pinnacle Systems (PCLE 5.74, +0.77), and reports that data processor SunGard Data Systems (SDS 31.07, +6.12) is exploring a possible sale of the company... In a perfect world, this slate of news would have provided a nice bid to the market, but things aren't so perfect these days as participants are growing increasingly concerned about the prospect of rising inflation, rising interest rates, and a deceleration in earnings growth... With respect to Monday's session, though, they also had to contend with the realization that there is an FOMC meeting tomorrow that will be bracketed by key inflation data in the form of the PPI and CPI reports released before the start of trading on Tuesday and Wednesday, respectively... Knowing that all three items will help dictate the near-term direction of interest rates, there was a reluctance to commit to positions Monday, particularly on the long side... Other factors running interference with Monday's trade included the absence of concerted sector leadership and a pullback in the Nasdaq that briefly took the Composite below psychological support at the 2000 level... There was a tepid recovery effort that pushed the Nasdaq back above that mark and helped the broader market pare larger losses, but ultimately, the market ended the day on a weak note as buyers didn't show a great deal of conviction... That point is evident in the negative breadth figures at the NYSE and Nasdaq and the fact that information technology (+0.1%) was the only one of the ten economic sectors to post a gain for the day... Strikingly, the market's most influential sector - financial (-1.0%) - was also its biggest laggard, which served as a bothersome deterrent for investors ahead of Tuesday's FOMC meeting... The materials sector (-0.80%) and energy sector (-0.80%) also weighed on the broader market as stocks in those areas were undercut by the dollar's strength and a modest dip in crude prices... On a relative basis the Dow (-0.6%) fared the worst of the major indices... Leading its retreat were AIG (AIG 57.90, -1.86), Citigroup (C 45.76, -1.09), and Altria Group (MO 63.28, -1.44)... The latter component fell on news that the Supreme Court rejected Philip Morris USA's appeal of a $10.5 mln verdict awarded to an ex-smoker with lung cancer... In other company news, Carnival Corp. (CCL 51.59, -3.24) provided fiscal Q2 (May) guidance below consensus estimates, citing higher fuel costs, and Time Warner (TWX 18.42, -0.28) was charged with fraud by the SEC for materially overstating online ad reveneue; TWX has settled the charge for $300 mln... ..S&P Midcap 400 -0.2%. ..Russell 2000 -0.2%. ..NYSE Adv/Dec 976/2328. ..NASDAQ Adv/Dec 1420/1668.

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Trade system guidelines (edited):
Only available to Newsletter Subscribers.

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Today's Picks - March 22, 2005

1.   KMRT - Kmart Holding

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-22		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 128.75

2.   NUE - Nucor

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-22		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 64.00

3.   PIXR - Pixar

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-22		Long	Above 15 high	Sell 1/2 once risk covered	Below LOD at time of setup
	* Please Note: If the stock gaps down at the open do not enter the trade unless it trades above 93.64

4.   NCX - NOVA Chemicals

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-22		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 43.99

5.   PDG - Placer Dome

Entry Date	Exit Date	Position	Entry Price	Target Price	Stop Price	Max P/L
03-22		Short	Below 15 min low	Cover 1/2 once risk covered	Above HOD at time of setup
	* Please Note: If the stock gaps up at the open do not enter the trade unless it trades below 16.94

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EOD = End of day.
LOD = Low of day.
PDC = Previous Day's Close.
S/R = Support/Resistance.
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