The Nikkei 225 (^N225) moved up 1.9% in overnight trading as the yen weakened further and Thursday morning trading in the European markets is showing some strength as well. This points to the likelihood that US stocks will try to make further upward progress in today's session. However it would be unwise to become complacent as there are significant hurdles for the market to cross in coming sessions. When the indices encounter resistance - which is likely to arise in many cases near where the 20 and 50 day EMA's are beginning to intersect - we would not be surprised to see another bout of selling.

The Russell 2000 (^RUT) faces a significant hurdle in the vicinity of the 800 level which is also where the 20 and 50 day EMA's have converged.

The banking index (^BKX) has bounced off the 200 day EMA but may spend some time consolidating near current levels before the next decisive move becomes apparent.







TRADE OPPORTUNITIES/SETUPS FOR THURSDAY MARCH 8, 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.

Very few charts are displaying any clear patterns at the present time in the aftermath of the turbulent behavior last week. The formation for Precision Parts (PCP) does reveal a fairly well defined barrier for the stock at $95.



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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