The S&P 500 cash index (^SPC) gained 0.4% in yesterday's session as it completed a re-test of the converged 20- and 50-day EMA's which sit at 1417. The intraday low was just below that registered on Wednesday. There was a technical index futures related flavor to much of yesterday's action and in general the larger cap indices out-performed the smaller cap Russell 2000 and the Nasdaq Composite yesterday both of which ran into more sustained bouts of selling.

The Nasdaq Composite (^IXIC) endured some prolonged weakness during yesterday's session which took the index down to test strong chart support at 2400. Buying support emerged and the index managed to regain its losses and closed within a point of Wednesday's finish.





The chart formation for the Russell 2000 (^RUT) also reveals a probing of the support afforded by the two short-term moving averages. The index came to rest very close to the pivotal 800 level.



TRADE OPPORTUNITIES/SETUPS FOR FRIDAY MARCH 30, 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.

We featured the chart for Polycom (PLCM) in yesterday's commentary and we pointed to the formation that we have highlighted which revealed bearish range expansion on Wednesday on heavy volume following Tuesday's inside session at the top of the range. The short recommendation performed very well yesterday as the opening price was above Wednesday's close and the spike down could have produced a seven percent profit for the session. This setup that can be tracked daily at the tradewithform website



The volatility bands are becoming very constricted for Integrated Device Technology (IDT) and there has been some positive divergences suggesting that an upward breakout could be imminent.



In Tuesday's commentary, we mentioned the fact that Sysco (SYY) had moved above both the 50- and 200-day EMA's in Monday's trading. The small consolidation pattern since suggests that our target of $35 still looks feasible in coming sessions.



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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