Friday brought a modest recovery to the market but on light trade. All major indices ended the session higher with higher beta issues leading the way. Both the small-cap Russell 2000 and the S&P MidCap 400 rallied 1.3% while the Nasdaq climbed by 1.1% The S&P 500 tacked on 0.6% and the Dow Jones Industrial Average Underperformed as it rose by only 0.3%.

Market internals ended the session mixed. Volume was down sharply across the board. Turnover plunged by 32.3% on the Nasdaq and by 28.2% on the NYSE. However, advancing volume topped declining volume by 2.0 to 1 on the NYSE and 3.7 to 1 on the Nasdaq. Because of the light volume, Friday's price action appears to be little more than a bounce in the wake of Thursday's viscous distribution.

Over the past two sessions the iShares Silver Trust ETF (SLV) has gapped down dramatically and sliced through support of all of its moving averages and its one year uptrend line. SLV has now set a lower high and a lower low which officially makes it a trend reversal candidate. A rally back into the 200-day moving average could present shorting opportunity in this ETF.



The iShares MSCI Thailand Investable Market Index ETF (THD) has recently broken its long-term uptrend line as it lost support of all key moving averages. THD is now testing support of its February 10 swing low. A bounce off of this level back into resistance near the 20-day EMA could provide a shorting opportunity in THD. We are monitoring THD closely for a potential short entry.



The market consolidated near the two-day low on Friday as all of the major indices moved sideways along their respective 20-day and 50-day moving averages. This type of price action following a big move often results in a continuation of the prevailing trend.

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.