Yesterday's session produced even more than its usual bout of confusing cross currents. The Sage from Omaha discussed in a live CNBC interview his offer to re-insure the municipal bonds of the monoline insurers. The proposal was greeted in the pre-market trading with a surge in equity index futures which allowed the market to rally strongly off the open. As the session wore on some were left scratching their heads as to whether Mr Buffet's proposal really amounted to anything that the market should be celebrating. It is not for the muni-market instruments that the banks and guarantors are seeking a safety net but rather the wondrous inventions of financial engineers - CDO's and such like - that few (I am being charitable) understand, and as in the case of AIG's troubles, even fewer know how to value.

The S&P 500 (^SPC) is moving further into the apex of yet another triangular pattern and the rejection at the 20-day EMA in yesterday's trading suggests that the tightening range bound formation may persist while traders mull over all of the ingenious remedies being proffered, both from government and the private sector, to the malaise in the credit market.



In line with several indices, including the Nasdaq 100 (^NDX) which we examined last week, Germany's DAX index (^GDAXI) is finding that the late February 2007 highs, just prior to the market's initial pre-occupations with structured debt issues, is now presenting a hurdle to recovery efforts.



Amgen (AMGN) has an extended bullish flag formation.



Express Scripts (ESRX) faces overhead resistance from two moving averages just above yesterday's close.



The chart for Fording (FDG) reveals a peak in momentum and money flow along with heightened intraday volatility.



Microchip (MCHP) registered a doji star/spinning top formation close to a chart resistance level which is further underlined by the nearby 200 EMA.



Clive Corcoran is the publisher of TradeWithForm.com, which provides daily analysis and commentary on the US stock market. He specializes in market neutral investing and and is currently working on a book about the benefits of trading with long/short strategies, which is scheduled for publication later this year.

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