For a third consecutive day equities moved higher. Yesterday's move also came on higher trade. All five major indices posted modest gains. The Nasdaq improved by 0.6% while the small-cap Russell 2000 and the S&P MidCap 400 tacked on 0.5% and 0.4% respectively. Both the S&P 500 and the Dow Jones Industrial Average added 0.2%.

Market internals ended the day on a bullish note. Volume rose by 14.9% on the Nasdaq and 12.8% on the Big Board. For a second day in a row advancing volume topped declining volume across the board. The advancing volume to declining volume ratio ended the day at 1.3 to 1 on the NYSE and 1.2 to 1 on the Nasdaq. Yesterday's price action and internals suggest that institutions were actively accumulating stocks. We would therefore classify Tuesday as both a follow through day and an accumulation day for the broad market.

Since the market began rallying six days ago the iPath S&P 500 VIX Short-Term ETF (VXX) has been consolidating well above its 20-day EMA. During this timeframe the S&P 500 has rallied well above the 20-day EMA. This price action in VXX suggests that bears are still in control of the longer term market trend.

Over the past week as the S&P 500 has rallied to reclaim its 20-day EMA the Vanguard MSCI Europe ETF (VGK) has demonstrated relative weakness to the broad market. During this most recent rally in the market VGK has been unable to move back above its 20-day EMA. Should this weakness persist in VGK, a market reversal may present a shorting opportunity in this ETF.

It was not surprising that the market only saw modest gains on Tuesday in the wake of Monday's impressive price move. However it is noteworthy that institutional investors appeared to be accumulating stocks yesterday. Based on yesterday's market action it looks as if there is more upside potential for the market.

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.