Stocks ended the day mixed on Thursday. The Nasdaq closed up 0.3%, as semiconductor stocks rallied sharply. The day ended with the Philadelphia Semiconductor Index up by an impressive 1.8%. The other major indices did not fare so well. The Dow Jones Industrial Average, the S&P 500 and the S&P MidCap 400 all gave back 0.2% on the session. The small-cap Russell 2000 finished down by 0.4%.

For the second consecutive day market internals were mixed. Volume on the Nasdaq finished flat, while the NYSE saw an increase in trade of over 5% yesterday. The increased turnover on the NYSE brought with it a negative overtone, as declining volume outpaced advancing volume by a ratio of 2.1 to 1. On the Nasdaq, up volume was greater than down volume by a factor of 1.5 to 1.

The iShares MSCI South Africa Index ETF (EZA), has been selling off for the past three days and may be close to finding support. One possible long setup would be an undercut of the 50-day MA, followed shortly thereafter by a reversal candle back above this moving average. During pullbacks, we look for ETFs that have exhibited relative strength and have formed support levels to act as a springboard for the next rally.



The Market Vectors Steel ETF (SLX), has been consolidating for the past three weeks near its 52-week high. Further, the consolidation has occurred on declining volume, which is often a bullish signal. A rally back above the January 5 high of $74.62 provides a potential buy trigger for this ETF. We will continue to monitor SLX for a possible buy entry.



Overall the broad market seemed to lack direction, as money rotated among sectors. Homebuilders and semiconductors were the big winners, while precious metals and oil saw heavy selling in Thursday's action.

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.