Stocks climbed their way back from early losses to end higher on the day, but on mixed trade. All five major indices closed in positive territory with the Nasdaq claiming its sixth consecutive winning session. The technology-rich index posted a 0.5% gain on the day. The small-cap Russell 2000 forged higher by 0.4%, while the Dow Jones Industrial Average, S&P 500 and S&P MidCap 400 all posted modest 0.2% gains.

For a second straight day market internals were mixed. Volume dropped on the Nasdaq by 3.0% but climbed on the NYSE by 1.9%. Also for a second consecutive day, advancing volume outpaced declining volume across the board. On the Nasdaq, up volume outpaced down volume by 2.0 to 1 and on the NYSE by 1.5 to 1. Although we would not officially label Thursday as an accumulation day, the price action was reasonably bullish.

Yesterday, via an intraday alert we entered a long position in the Direxion Small Cap Bull 3x (TNA). We liked the trade because TNA sold off, tested the three-day low, and reversed on a big spike in volume to close at session highs. Further, it closed above resistance at the two-day high. The trade also closed in the money. Trade details are posted for our subscribers in the open positions segment of the newsletter.



The iShares S&P Global Tech Sector I ETF (IXN) has been consolidating above its 200-day MA for the past eight sessions. A volume-assisted move above the three-day high of $60.41 could present a buying opportunity in this ETF. We often look for false breakouts and retests of support to provide the pivot points for potential trade entries. We are placing IXN on the watchlist. Trade details are available to our members in the watchlist section of the newsletter.



Wednesday brought another round of traders buying on pullbacks. We often discuss that we do not trade news. Today was an excellent example of why we avoid the media. Today's news was primarily negative as weekly jobless claims increased and December retail sales were worse than expected. Nonetheless, the market rallied in the face of this negative news, and the SPDR S&P Retail ETF (XRT) closed higher on the day. The market continues to flash bullish signals and appears headed higher.

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.