Stocks closed higher on Monday, but faded into the close. Trade was light. The small-cap Russell 2000 finally set a new 52-week high, as it cleared resistance at 833. By the closing bell, the Russell had tacked on 0.9%. The Nasdaq finished a close second as it added 0.8%. The S&P 500 improved by 0.4%, while the S&P MidCap 400 saw a 0.2% advance. The Dow Jones Industrial Average was the day's laggard, as it closed only fractionally above breakeven. Telecommunications, construction and utilities were among the weakest sectors. Gaming, tourism and computer hardware showed relative strength.

Yesterday marked the fourth consecutive days that internals were mixed. Volume plunged on the Nasdaq by 23.9% and on the NYSE by 44.9%. However, advancing volume held the upper hand over declining volume by a ratio of 1.2 to 1 on the NYSE and 2.0 to 1 on the Nasdaq. Based on Monday's light volume, it is safe to say that institutions were not active in the market. Neither the Nasdaq nor the NYSE posted an accumulation day.

Over the past four sessions, the iShares MSCI Mexico Investable Market ETF (EWW) has been consolidating in a tight pennant-like formation. A move above yesterday's high of $61.50 could provide a buying opportunity in this emerging market ETF:



Over the past two sessions, the iShares Dow Jones US Home Construction ETF (ITB) has been exhibiting signs that it may be ready to revisit support near its 20-day EMA. An undercut of this key mark could offer a possible buy entry trigger for ITB. We will continue to monitor this ETF as a potential long candidate on a pullback.



The breakout in the small-cap Russell 2000 to a fresh 52-week high was a positive development yesterday and should spur more buying activity in the market. Ideally, we would now like to see the small-cap index hold the breakout and close the gap with the other major indices before pulling back to test its new found support.

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.