Yesterday's somewhat erratic trading may carry over to today as the markets digest the release of the March employment data. The S&P 500 retreated slightly from Wednesday's multi-year high and there were divergent performances from the other indices.

Recent concerns about capacity over-utilization that have surfaced in connection with recent employment data reports may well unsettle the markets again today and it would be useful to monitor the Treasury market reaction to the data.

Our online portfolio had a very good day yesterday with a 12% gain for XMSR, 9% for Amazon and a six percent gain for Sirius Satellite Radio (SIRI).

The semiconductor sector has rallied strongly over the last several sessions and this has helped to inject some pace into the overall market. The exchange traded sector fund IGW has now reached an area of resistance that has confined prices on four previous occasions this year.

The yield on the Ten Year note moved up to 4.89% yesterday which is a level that has not been seen since May 2004. With stocks, gold and Treasury yields all breaking out to multi-year highs this is definitely a market environment that requires some cunning.

The ETF for the Health care sector, XLV, has been eroding steadily for the last three weeks but has now reached an area of potential chart support, and the low yesterday touched the 200 day EMA.

TRADE OPPORTUNITIES/SETUPS FOR FRIDAY APRIL 7, 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.

American Pharmaceutical (APPX) shows signs of accumulation and the volatility range is highly constricted - a breakout seems to be imminent.

Franklin Resources (BEN) is approaching the intersection of the 20 and 50 day EMA in conjunction with a bearish ascending channel formation.

We recommended Foundry Networks (FDRY earlier this week but were too early. We still sense that there is a short trade opportunity here in coming sessions

Another trade that we miscalculated earlier in the week was for Travelzoo (TZOO) which just dropped below our stop level. The anticipated follow throught from the long green candle from last Friday materialized yesterday with an 11% gain on heavy volume.

New Century Financial (NEW) is displaying negative divergences in conjunction with a possible double top formation.

Comverse Technology (CMVT) would seem to be an attractive short candidate as it approaches the circled area on the chart.

JetBlue is showing accumulation within a very constricted volatility range.

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.

Disclaimer
The purpose of this article is to offer you the chance to review the trading methodology, risk reduction strategies and portfolio construction techniques described at tradewithform.com.  There is no guarantee that the trading strategies advocated will be profitable. Moreover, there is a risk that following these strategies will lead to loss of capital. Past results are no guarante of future results.  Trading stocks and CFD's can yield large rewards, but also has large potential risks. Trading with leverage can be especially risky. You should be fully aware of the risks of trading in the capital markets. You are strongly advised not to trade with capital you cannot afford to lose. This article is neither a solicitation nor an offer to buy or sell securities.