The S&P 500 registered a 0.5% gain yesterday to close at 1250 but all trading was confined within the ranges of last Friday - in other words an inside day. The intraday range was also the narrowest since early May.

The chart pattern points to a real stand off as we wait poised below the descending line through the highs since early May and still in an upward trend from the recent lows. The expectation is growing that could see a fairly explosive range expansion day after the FOMC decision but a lot depends on how the Treasury market reacts later this week to the statement.

The Nasdaq 100 (^NDX) has a similar formation to the one we discussed above as it also recorded its narrowest range since May 9th. Range expansion is imminent but we would be surprised to see much movement until the FOMC decision.

The banking index shows that Fridayââ,¬â"¢s action broke down from the triange formation but after yesterdayââ,¬â"¢s trading we appear to be on the verge of re-entering it. It may be that Fridayââ,¬â"¢s move was the fake out before we find out the marketââ,¬â"¢s real intentions.

TRADE OPPORTUNITIES/SETUPS FOR TUESDAY JUNE 27, 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.

Segate (STX) registered an inside day and NR7 on tiny volume. The intersection of the 200 and 20 day EMA, about one dollar above yesterday's close would seem to be a feasible target in the next few sessions.

The chart for Comcast (CMCSA) looks quite bearish and although it may attempt a rally back towards $32 we would expect a visit to the $30 level in the sessions ahead.

Carnival (CCL) has an unsual horizontal channel associated with a flag pole and it may be looking to test the $43 level in coming sessions.

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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