The last day of July brought a very quiet session as most of the indices barely budged from where they settled last Friday. The S&P 500 chart shows a tiny inside day candlestick just below the critical 1280 level. Volume on the SPY proxy came in at approximately fifty percent of the 15-day average

The Nasdaq Composite (^IXIC) also registered a narrow range candlestick as it contemplates the hurdle ahead. Pushing through The 2100 level would violate the descending three month trend line and provide a platform for taking on the 2160 level.

The chart for the Dow Jones Industrials proxy DIA underlines the subdued volume in yesterdayââ,¬â"¢s session as once again the index hesitates at the resistance hurdle that lies ahead.

The Amex Natural Gas index (^XNG) has stalled three times previously at the 440 level over the last year but yesterday pushed above to record its first ever close above this level. Individual stocks in the sector were also big movers yesterday as Peabody Energy (BTU) gained 8%, Patterson (PTEN) moved up 7% and Grey Wolf (GW) by more than five percent.

TRADE OPPORTUNITIES/SETUPS FOR TUESDAY AUGUST 1, 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.

Frontline (FRO) could be vulnerable to corrective action as there would appear to be overhead resistance at the $40 level.

Intel (INTC) has rallied back from its steep sell off in mid July and may now be vulnerable to further selling.

Intersil has similar issues to those we have just noted for Intel.

The chart for Walgreen (WAG) is showing a momentum peak and negative money flow divergence.

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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