Daily Form July 10, 2007

Profit Patterns and Risk Management For Active Traders
Trade successfully without having to be right about the underlying market direction
TUESDAY JULY 10, 2007       05:58 ET

The S&P 500 (^SPC) is languorously moving back towards its recent highest ever close but there seems little directional certainty behind recent moves. It is hard to tell whether this is because of a seasonal slowing of volume or a lack of conviction about the sustainability of the strong rally since the March lows.

A similar story can be said for the Russell 2000 index which closed marginally below its historic high and registered a tiny doji star candlestick.

The Dow Jones Utilities average (^DJU) is hesitating at the 510 level and seems to be struggling to break away from the gravitational pull of the key moving averages. On a related note the chart for the banking index (^BKX), another sector that is very sensitive to long term rates, shows how that index is struggling to forge through resistance at the intersection of all three moving averages that we track


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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FUL  HB Fuller Co.  

Fuller (FUL) has a bull flag formation and may be preparing for a further advance.

KLAC  KLA-Tencor Corporation  

KLAC has rallied to a point of potential breakout and the chart formation and yesterday’s above average volume seem to be pointing to further progress ahead.