Published on 06/30/2006

The activity of the QQQQ over the last few sessions was pointing to steady accumulation and as soon as traders realized that the FOMC did not have a fifty basis point surprise hike in mind.

Corcoran Technical Trading Patterns for June 30

The long expected range expansion began just after 2.15 p.m. in yesterday's trading and propelled all of the indices much higher to register substantial gains across the board. One of the best performers was the Nasdaq 100 (^NDX) which made a very decisive 3.1% gain on the day. The activity of the QQQQ proxy over the last few sessions was pointing to steady accumulation and as soon as traders realized that the FOMC did not have a fifty basis point surprise hike in mind. The strong trending of the latter part of the day showed powerful dynamics as shorts were covering and fund managers engaged in some end of quarter portfolio tactics.

The Russell 2000 (^RUT) produced an explosive rally yesterday gaining 3.8% to close above the 200 day EMA and just below the 720 level which we would expect to see today. Further evidence of portfolio cosmetics could be seen and the index could well be headed toward 740 in short order.

Earlier in the week we suggested that we expected the S&P 500 index to be positioned at the 1260 level going into the FOMC announcement and that was more or less what transpired in yesterday morningâ€™s trading. Following the decision the index took off to record a more than 2% gain on the day. The daily gain matched that of June 15th and shows the power of counter trend rallies in the context of the recent severe declines. We would expect 1280 to be tested today but we may need to wait until later next week, after the holiday and end of quarter maneouvring to really guage the significance of yesterdayâ€™s rally.

The EFT for the Consumer Staples sector, XLP, broke above the recent highs yesterday to record its highest close since the spring of 2002.

TRADE OPPORTUNITIES/SETUPS FOR FRIDAY JUNE 30, 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.

Yahoo (YHOO) may face resistance as it approaches the 200 day EMA and the resistance levels coinciding with several Shooting star formations in April and May.

Goldman Sachs has an important test ahead at the $156 level

Pan American Silver (PAAS) could benefit from the renewed momentum behind the gold and silver mining stocks.

Disney (DIS) has been steadily climbing an ascending channel formation following the selling that emerged earlier in June.