Daily Form June 19, 2007

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
TUESDAY JUNE 19, 2007       06:01 ET

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.


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.
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AAPL  Apple Computer Inc.  

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

WOR  Worthington Industries Inc.  

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.

PH  Parker-Hannifin Corp.  

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

WFC  Wells Fargo and Company  

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

AVID  Avid Technology Inc  

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.

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