Stocks ended Friday's whipsaw session lower on mixed trade. In a reversal of Thursday's action, high beta stocks led the market lower as the S&P MidCap 400 and the small-cap Russell 2000 shed 1.6% and 2.6.% respectively. The tech rich Nasdaq fell 1.1% while the S&P 500 slid 0.8%. The Dow Jones Industrial Average showed relative strength on the day as it only fell 0.2%.

Market internals were mixed for a third consecutive day. Volume slid on the Nasdaq by 6.9% but climbed on the NYSE by 3.3%. However, declining volume topped advancing volume by 4.0 to 1 on the NYSE and 3.0 to 1 on the Nasdaq. Friday's middling internals point to a lack of institutional participation on the session. Still, the NYSE did close near session lows on higher volume suggesting that bears are still in control of the Big Board.

Via an intraday alert we entered a long position in the UltraShort Real Estate ProShares ETF (SRS) after it undercut and reclaimed support of its 20-day EMA. Trade details are available to our subscribers in the open position segment of the newsletter.

In Friday's newsletter we discussed the ProShares UltraShort MSCI Emerging Markets ETF (EEV) and stated, "The formation of a reversal candle would provide an ideal setup for a possible long entry in this inverse ETF". On Friday EEV formed a reversal candle as it gapped down, undercut its 20-day EMA and reversed on a spike in volume to close near session highs. We are placing EEV on the watchlist. Trade details are available to our subscribing members in the watchlist section of the newsletter.

Despite our bearish leanings, last Tuesday's market reversal has us on guard for a potential bullish follow through day in the market. We are prepared to take profits quickly in any short positions should the market put in an accumulation day anytime this week.

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.