Throughout the first half of yesterday's session, it looked as though the bears were finally going to have a day in the sun, but the bulls flexed their resilient muscles, enabling stocks to recover and close with mixed results. The Dow Jones Industrial Average edged 0.2% higher and the S&P 500 was unchanged. After falling nearly 1% in the morning, the Nasdaq Composite reversed to close only 0.2% lower. The S&P and Dow finished near their highs of the day, as the Nasdaq settled in the upper quarter of its intraday range.

Turnover eased across the board, enabling the Nasdaq to dodge a bearish "distribution day." Total volume in the NYSE was anemic, limping in 36% lighter than the previous day's level. Volume in the Nasdaq decreased 6%. In both exchanges, volume remained below 50-day average levels for the third straight day. Market internals were negative, but not by a wide margin. In both exchanges, declining volume outpaced advancing volume by a margin of less than 3 to 2.

Today, all eyes will be on the latest announcement on federal economic policy, scheduled to be reported by the Federal Open Market Committee (FOMC) at 2:15 pm EDT. While no change in the Fed Funds Rate is expected, Wall Street will be paying close attention to whether or not the Fed drops the verbage of keeping interest rates low for an "extended period" of time. Though there's been a bit of volatility, stocks have been little changed for the past two days, and volume has been light. Trader and investors have apparently been standing on the sidelines, but the release of this afternoon's announcement should provide the market with more direction. For now, we remain primarily in pullback buying mode, stalking strong ETFs for potential buy entry as they retrace to key support levels. Below are the charts of a few ETFs on our radar screen for potential buy entry in the near-term:









In addition to the setups above, we continue to monitor KBW Capital Markets SPDR (KCE) for a pullback to add additional shares to our existing position, as illustrated in yesterday's commentary. A bounce in CurrencyShares Euro Trust (FXE), into major resistance of its 50-day MA, also remains on our radar screen for potential short entry. If any of the ETFs above meet our criteria for buy entry, we'll promptly send an Intraday Trade Alert with details.

Open ETF positions:

Long - KCE, GDX
Short (including inversely correlated "short ETFs") - (none)

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.