After Friday's impressive broad-based rally, today's trade was predictably lighter, as the market digested its gains and traders sidelined ahead of tomorrow's FOMC announcement. The Fed is widely expected to raise short-term interest rates another quarter of a point tomorrow for the eighth time since last June, which the market has already priced in. The market opened with the major indices heading higher, but mixed economic data released at 10:00 EDT quickly sent early buyers to the exits and the indices into the red for a good part of the day. The market continues to struggle to sort out the impact of rising inflation coupled with softer economic growth. Nevertheless, late in the day, the market staged a solid recovery off the day's lows, erasing the losses and ending the day with respectable gains.

The $SPX closed near the high of the day, stopping just short of key resistance in the 1163 area. The leading index has been setting a series of higher lows over the past couple of weeks.

The $COMPX also closed near the high of the day, sustaining the positive tone established in Friday's rally. While it's definitely too soon to bet the farm, the potential for an intermediate term bottom has been put into play. That said, there is significant resistance just overhead around 1,963 which needs to be cleared convincingly before the bulls can claim the edge.

A 15-minute chart of the $COMPX reveals a bullish inverse head & shoulders pattern, which suggests a move higher in the days ahead if the neckline resistance is cleared to the upside.

Some volatility has returned to the market in recent days, which is good news for traders. The environment continues to be tricky to navigate, however, and is likely to continue to be best suited for day trades and short-term swing trades. There is a prevailing sense of skepticism among traders, accompanied by an unwillingness to make big bets. You will no doubt read and hear divided opinion among forecasters, analysts, economists, and so-called "market gurus" who are more than willing to make bold predictions of one kind or another. One highly respected name will swear stocks are on the verge of collapse and our economy is headed for a major depression, while another announces stocks are setting up for a stunning and prolonged advance. Never forget that as traders, it is imperative that you keep an open mind at all times and consider a range of possibilities so that you are ready for whatever the market presents you with. Trade what's in front of you and always strive to focus on what IS happening, not on what was "supposed" to happen. Being successful in the market is not about knowing what will happen, it is about being ready for what actually does happen.

First up are some stocks to watch on the long side.

POTENTIAL LONGS:

GOOG: Google is a provider of online search and internet content services and a momentum favorite that trades on the NASDAQ. An average 9,442,100 shares change hands daily with 156 million that float. The company posted very strong earnings last month and the chart is setting up with a nice tight bull pennant that looks poised to break to the upside. New longs would be entered as the stock moves above today's high of $223.70, which is just above the descending trendline along the top of the pennant. Stops would be placed just beneath today's low of $220.21.

WFMI: Whole Foods Market is a natural foods supermarket chain that has enjoyed a long and strong uptrend stretching back to 1996. The stock has an average daily volume of 7,900,000 shares, with 63 million that float. This stock has been both a good IRA/long-term investment and an excellent trading stock. New longs can be entered as the stock clears today's high of $100, or on a slight pullback as long as it holds above today's low of $98.33. Stops should be placed just under today's low, in the $98.25 area. The company reports earnings after market on 5/4. It's generally advisable to close out at least part of a position ahead of earnings, particularly for active traders. Most importantly, know your own risk tolerance and be aware of the earnings calendar for stocks you are invested in.

PENN: Penn National Gaming trades on the NASDAQ in the Leisure-gaming/equipment group. It trades an average daily volume of just over 1 million shares and has a float of 66 million. The chart has formed a decent cup & handle pattern and is just now attempting to lift above the descending trendline of the handle. The technical trigger for a long entry would be as the stock clears the pivot, or high point, of the handle at $34.22. More aggressive traders can enter anywhere above the descending trendline but need to recognize that the pattern has not yet triggered and therefore carries a greater risk of failure. Stops are generally best kept quite tight until the stock clears the pivot on strong volume.

ESRX: Express Scripts is a provider of Pharmacy Benefit Management Services to health insurers, managed care organizations, and employers. It trades on the NASDAQ in the medical and dental services group. The stock has been a steady performer and sees a little over a million shares change hands daily. The chart shows a nice high base and the stock just starting to break out above an ascending triangle pattern. Longs can be entered on a break above $90.80 on good volume, or on a pullback anywhere down to $87.50, but with a hard stop at that level. This stock also qualifies as an IRA candidate.

MANT: Mantech International trades in the Computer & Technology Services group on the NASDAQ. This one is a little on the thin side with only 175,500 shares traded on an average day, and a float of only 17 million. On lower volume stocks it's generally a good strategy not to put on too large a position as it can be tricky to exit quickly with an acceptable fill should the trade not perform as expected. There are a lot of things for longs to like on this chart, however, as it is extremely well-positioned for additional upside. A weekly chart going back a few years shows a very well-defined double V-bottom, a bullish formation. On the same chart, the second 'V' also serves as the 'head' in an inverse head & shoulders pattern, also a bullish indication. Moving to a daily chart over the past 10 months, a bullish ascending triangle is in charge. A long entry triggers when the stock clears $25.30 on nice volume.

With key resistance overhead and plenty for the market to continue to fret about, there are also short opportunities for active traders.

POTENTIAL SHORTS:

GTRC: Guitar Center trades in the Retail-leisure Products group on the NASDAQ. Its average daily volume is 588,500 shares, with a float of 23.5 million. After dropping 7 points for us after hitting the short trigger on 4/27, Friday's market rally brought about a strong intraday reversal with the stock closing near the high of the day. Major resistance lies just overhead, however, and it is typical for a stock to snap back to test the breaking point before continuing with a move. Both the 200-day SMA and the 200-day EMA come into play between $49.75 and $50.06 and should prove tough resistance. This one may give us an encore, heading back down to test the recent low of $45. Always play it tighter and more defensively the second time around, particularly if you have nice gains from the first ride down. New shorts can be initiated from here up to $50, with a hard stop around $50.20.

PARL: Parlux Fragrances falls into the Cosmetics & Personal Care group on the NASDAQ and trades an average of 355,300 shares daily. This one has a tiny float of only 5.5 million shares and can, as a result, post exaggerated moves. Our short entry triggered on 4/27 and arrived at our first target, giving us a gain of 2 1/2 points so far. The stock closed below the 200-day moving average two days in a row, signaling additional weakness may be in the cards, so eyes should move to our second and more aggressive target in the $15-$16 range. There is a gap fill at $15.95, and at least partial profits should be locked in there as gap fills are capable of providing support. If the stock drops below gap fill, look to either be out of the position entirely or move to a very tight stop ahead of $15.

COCO: Corinthian Colleges is in the Commercial Services/Schools sector and trades 1,480,900 shares daily on the NASDAQ. There are 87 million shares that float. After a high-volume gap down last week, the stock has set up a bear pennant formation and seems set to break down to lower prices. Shorts can be entered on a break below $14, with a stop around $14.50 for those wanting to keep it tight, or $15.30 for those willing to give it a little more leeway. First target is the gap fill at $11.37 where at least partial profits should be taken, with the second and more aggressive target at $10.00.

Trading can be riskier and more volatile on a Fed day, and many professional traders simply sit back and watch the action. If you are trading, remember to have a plan in place and avoid impulse trades. The initial market reaction after the announcement is often reversed and trade can be very erratic. In my experience, there can be good scalping opportunities on Fed days, but have a hard stop in place at all times. Happy trading!