The S&P 500 cash index (^SPC) finished yesterday's session marginally higher than last Thursday's close to register a new multi-year high. The last four sessions have produced narrow range sessions and the market appears to have adopted a posture of waiting and watching the impending earnings announcements before settling on its next significant move.

The Nasdaq 100 index (^NDX) has gained 250 points since the mid July lows but the recent momentum appears to be dissipating. Since January 11th when the index recorded its most recent highest close at 1758 there has been a succession of lower highs. The chart reveals a very pronounced "V" formation that stems back to mid April and we may require some near term consolidation before an energetic and sustained challenge to the previous January levels can be mounted.

Treasury yields resumed their move upwards from last Friday following Mondayââ,¬â"¢s holiday session. The ten year note finished the session at 4.75% and the next five basis points up to the 200-day EMA also coincide with chart congestion and probable resistance which will need to be tested.

TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY OCTOBER 11, 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.

Cadence Design (CDNS) is on the verge of a breakout from the range that has been in place since early June.

DaVita (DVA) has fallen in each of the last three sessions but on light volume. Yesterday's close was below the 50-day EMA but there is some potential chart support at $56.

EBAY looks as though it is targeting a test of the 200-day EMA which is more than two dollars above yesterday' close.

A break below the ascending trend line in the wedge formation for Ford (F) could trigger a further wave of selling.

Gilead Sciences (GILD) should be monitored as a candidate on the short side as a pullback from the steep drop on October 2nd appears to be faltering.

Humana (HUM) is losing momentum and undergoing distribution

Coca Cola (KO) moved below the 50-day EMA on more than twice the average daily volume.

Legg Mason (LM) pushed further upwards on substantial volume in what appears to be a valid breakout pattern.

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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