Yesterday's session was a real tussle between the bulls and the bears as key levels on the S&P 500 were tested by index futures traders. A couple of times it appeared as though the critical 1365 might be breaking which could have caused energetic selling, but at the end of the session the index avoided a meltdown and the bulls live to fight another day.

We are still essentially range bound but the thrashing around is becoming a little more disciplined. The Nasdaq 100 (^NDX) also was a lot less lively and held up well despite the thorough testing of the S&P 500.



The broker/dealer sector (^XBD) was one of the worst hit sectors yesterday with a more than three percent decline. As suggested earlier this week and hinted at in Bernanke's testimony there is a growing realization that bankers are less likely to return to their enthusiastic pre-August 2007 modus operandi regarding structured credit instruments.



Chairman Bernanke's testimony in which he has to provide the requisite gravitas as an inflation fighter took place against the backdrop of crude oil now breaking above $102, gold hitting all-time highs and the euro currency continuing its surge well beyond $1.50.



The gold and silver index (^XAU) could be on the verge of a parabolic ascent pattern.



My apologies for including among the potential setups in yesterday's commentary a very outdated chart for Global Santa Fe (GSF) which no longer is listed as a stand-alone stock. It somehow slipped through the pattern detection program that scans hundreds of charts and I confess to being embarrassed about not realizing that I was writing about a pattern from three months ago!

Cognizant Tech (CTSH) has a flag like pattern and, with yesterday's tiny doji star pattern, the stage appears to be set for a move upwards towards at least the 200 day EMA.



After running into resistance at its 200-day EMA, Seagate Technology (STX) succumbed to the expected selling pressure and dropped below all three moving averages on increased volume. Momentum and money flow suggest that a further tradable correction is under way.



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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