SHOGUN TRADING STRATEGY
DAILY ANALYSIS FOR 07/10/06

(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

LONG TERM ANALYSIS

TRADING CONDITIONS

The market has been moving sideways for almost two months now. It has been resting, consolidating, repairing, getting ready for another big move.

If we break the 1510 level on the NDX, it could spell a large move down again. As you can see by the chart, it will be a break of a major support level that would make the long term charts, especially the weekly chart, very negative. In other words, a break of the 1510 support level could carry us down to 1385 again, which is quite a ways down.

So what should we do about it? Have the ammunition ready in case that happens. Make sure that you short trades ready to go so when you see the market breaking, you will be able to react. If the market is breaking, you wont have time to search for candidates, you will only have time to execute, so make sure you have those ready in case it happens.

For the short term, we are still within this tight range and we will play trades in both directions. When the time comes and we break support, we will switch to all short side trades.

Hope this helps,

Shay Horowitz - ShogunTrading