After several unsuccessful attempts to penetrate the 1310 level the S&P 500 finally made it through this barrier yesterday and closed at a new multi-year high of 1311.56. The volume on the exchange traded proxy SPY was below its 15 day moving average and we would want to see more confirming evidence before the breakout can be celebrated.

As we have been saying for some time the strength in the small and midcap stocks suggests that asset managers are continuing to accumulate with confidence and in yesterday's trading we saw new all time highs for the Russell 2000, S&P Midcap (^MID) and the Dow Jones Transports.

The Nasdaq 100 cash index (^NDX) also moved through the resistance barrier that has been in place since the beginning of February and managed to move up almost 1% to close at 1732. With only 25 points further to go until we reach the January 11th closing high of 1758, and with the release of employment data tomorrow, we would not be surprised to see increased volatility arising as we approach this level.

The Gold index (^GOX) has been rising steeply for several sessions and is now poised just below its late January highs. As we noted in regard to the Nasdaq 100 we are about to see whether these two very different indices are able to break out to multi-year highs

Another chart that is at an inflection point is for the Retail sector index (^RLX) which has also made a rapid (possibly too rapid) turnaround in the last two sessions and closed yesterday just below its recent highs.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY APRIL 6, 2006

The patterns identified below should be considered as indicative of eventual price direction in forthcoming trading sessions. None of these setups should be seen as specifically opportune for the current trading session

Cree is showing signs of negative divergences and as yesterday's long lower tail shows there may be downward pressure on the stock in coming sessions.

One of the stocks featured recently was Marvell Technolgy (MRVL) and as anticipated we saw a healthy 5% move up yesterday from a basing pattern that was also showing positive momentum and money flow divergences.

Sirus Sattellite Radio is getting ready to make a move and recent volume, while it has been light, is pointing towards accumulation.

Bristol Myers (BMY) would be worth monitoring in coming sessions for a resumption in the buying interest that produced the major gap up in mid March.

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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