The Dow Jones Industrials closed at 11543 yesterday just 80 points below the May 10 close and 180 points below the all time high of 11722 achieved on January 14, 2000. Yesterday's action in the proxy DIA was below average from a volume perspective and there may be some temptation for some traders to get out of the way until it becomes clear whether the May high can be decisively overcome.

The Nasdaq Composite (^IXIC) closed at its highest level since May 16 yesterday. If the index can now establish a support platform above 2220 the next hurdle will be some previous chart resistance in late 2005 in the vicinity of 2260-2280.

The S&P 500 cash index (^SPC) continues to climb the steep buy channel that has been in place since the mid July low. We may well see a new multi-year high registered in todayââ,¬â"¢s trading but the market appears to be somewhat overstretched at present and may need to digest its recent gains.

The retail sector continues to shine and has now added seven percent in the last four sessions in an almost vertical ascent pattern.

TRADE OPPORTUNITIES/SETUPS FOR THURSDAY SEPTEMBER 14, 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.

We featured the chart for Comcast (CMCSA) last week and the stock is still facing resistance at the $35 level while momentum is fading.

Pepsico (PEP) is showing some negative divergences.

General Mills (GIS) has begun a correction process that could see a revisit to $50.

Costco Wholesale (COST) has mounted a recovery rally following the gap down in late August and could run into renewed weakness as it approaches the $51 level where the 50- and 200-day EMA's have converged.

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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