Volume was subdued in yesterday's trading. The S&P proxy, SPY, registered just sixty percent of its average daily volume and not dissimilar figures were seen for IWM and QQQQ. The indices hovered around the unchanged level for much of the session and small narrow range candlesticks were recorded in proximity to the recent highs. The Russell 2000 (^RUT) registered an inside session, which taken in conjunction with Friday's "island" formation could be pointing to some need to digest the valiant recovery since the weakness shown in the first full week of trading in June.

Treasury yields pulled back a little more yesterday which is perhaps holding the interest rate fears in check for the time being, but persistent strength in the energy complex is a factor that may rattle any complacent notions regarding cost pressures in the world economy.



The Nasdaq Composite (^IXIC) closed the session at almost exactly the same level as Friday's session and as noted above there is an "island" formation developing at the top of the range and above the upper volatility band. At the very least some time spent consolidating recent gains seems likely.



As in yesterday’s commentary we would draw attention again to the extremely subdued volume that has accompanied the recent upward price performance in the semiconductor sector fund, IGW.



TRADE OPPORTUNITIES/SETUPS FOR TUESDAY JUNE 19, 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.

Apple (AAPL) is facing a retest of the $126 level, which brought out some sellers previously.



We recently pointed out that Worthington Industries (WOR) has climbed an ascending pullback channel and seemed to be stalling. This pattern was reinforced in yesterday's trading.



Parker-Hannifin (PH) has similar characteristics to those just noted for WOR.



Continuing our theme of revisiting some of the charts featured recently, WFC produced a doji star formation on very subdued volume.



Avid Technologies (AVID) has an ascending wedge pattern with some positive divergences. It now faces the hurdle of pushing above the level recorded on the gap down in late April.



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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