As we closely peruse our charts each day, we continue to see little in the broader equity averages to reveal a good risk-reward short term trade -- at least for the moment. A resolution of the recent chop is coming, but it is not likely until the month of July. We cannot reiterate enough that the most well defined chart pattern out there is that of the Value Line Index. This may seem odd in an era where people continue to be overly focused on the Nasdaq, but a resolution to the 4-month coil in the Value Line will help us differentiate whether the recent Nasdaq rally is for real or not. Put in Elliott terms, have we just finished a 4th wave correction, with a last round of upside fireworks ahead? Or did we finish wave 1 down at the end of May with a current wave 2 bounce? Sometimes in Elliott analysis all counts lead in one direction. In this case they do not, having diametrically different implications.

What we do see at the moment are some individual equity chart patterns that are of interest, and may help give a glimpse of what the broader indices will eventually do.

Pictured below is a chart of Cadbury-Schweppes which, if our Elliott wave count and Fibonacci rhythm are correct, still has at least one more new high coming toward $37. Given the recent acquisition of Best Foods at a premium price, followed by this week's sale of Seagrams, could companies such as Cadbury-Schweppes be next to the merger alter? The Elliott wave count certainly suggests that a positive bias is warranted.

Chart produced using Advanced GET End-of-Day

In a separate analysis to follow, we also think Campbell Soups is another consumer food/beverage provider dirt cheap at $30 a share.

Is this the same longer-term bearish Sand Spring Advisors speaking? Sure it is, but in the short term we see far too many individual chart patterns looking like the one above to be espousing a bearish stance for now. It's clearly a stock-picker's world with a tremendous amount of noise surrounding these hidden trends. Just as Xerox is not quite done to the downside (see yesterday's Chart du Jour), nor is Cadbury-Schweppes likely done to the upside. We can almost hear those M&A people scheming already.

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.