SHOGUN TRADING STRATEGY
DAILY ANALYSIS FOR 04/17/06

(Use this chart and commentary to plan your trades. The goal is to trade with the market, never against it. This chart will show our expectation, projection and commentary. This is a very important tool for you.)

SHORT TERM ANALYSIS

The market broke out of trading channel and is now consolidating waiting for next trend.

LONG TERM ANALYSIS

The market pulled back down to support levels. If it continues the move up, it will confirm support levels and the next up trend.

TRADING CONDITIONS

The market is going to have an interesting couple of weeks coming up. The NDX, NASDAQ 100 index, pulled back down to the 1700-1705 support level and held it. If it starts moving to the long side, it will start on the second wave up of a breakout. In other words, it will start a major up swing that could take weeks or months.

The disadvantage of a longer term consolidation, such as the one we just had since November, is that they are very boring to trade. The advantage of such long term consolidations is that they generate huge trends that follow them.

Think about it as a compressed spring, the more you compress it, the more energy it has.

If we swing up and break the 1750 resistance level, you can expect the NDX to go up to 1834, a 5% move.

As for this next week, its earnings season again. We should see some excitement and momentum again, but beware of the morning gaps.

Remember that the best strategy for gaps is to wait five minutes to see whether they hold or fall back.

Hope this helps,

Shay Horowitz - ShogunTrading