There were signs yesterday that the procrastination that has beset the markets following the FOMC statement last week may be about to see a resolution. The Treasury market saw a decisive decline in yields, with the yield on the ten year note retreating to the 4.75% level which coincides with the 200-day EMA. An intraday spike down for the Nasdaq Composite ran into buying support and as the wedge pattern indicates the odds favor a breakout from the recent range.

The Russell 2000 (^RUT) moved marginally higher as it registered another historic high. The index appears to be biding its time as the focus on the relative underperformance of the Nasdaq stocks has attracted the attention of most market technicians and commentators.





The FTSE 100 (^FTSE) struck out above the range that had confined its price action since the turn of the year and reached a new six year high.



TRADE OPPORTUNITIES/SETUPS FOR WEDNESDAY FEBRUARY 7, 2007

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.

Nortel (NT) slipped more than 2% on almost twice the average daily volume. There are negative divergences on the chart which suggest that in the intermediate term the $24 level may need to be tested.



The daily chart for Las Vegas Sands (LVS) also reveals some momentum and money flow divergences and the 3.3% drop yesterday reached towards the probable support level at $96 but we sense that a more robust test of the level may be required.



Also in the gaming sector there may be a bearish set up developing for Wynn Resorts (WYNN)



The chart for Freddie Mac (FRE) has some indications that a basing pattern is being attempted and an intermediate recovery pattern may be emerging.



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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