For the most part, stocks finished higher on Friday on mixed trade. Higher beta issues struggled as the small-cap Russell 2000 and the Nasdaq closed lower by 0.2% and 0.1% respectively. The S&P MidCap 400 ended the session flat, while the NYSE, Dow Jones Industrial Average and S&P 500 tacked on modest gains of 0.5%, 0.5% and 0.4% respectively. Heavy construction, internet services and airlines showed relative weakness yesterday, while insurance, healthcare and oil services saw relative strength.

Market internals ended the day positive across the board. Trade finished higher on the NYSE by 1.8% and on the Nasdaq by 2.5%. Advancing volume topped declining volume across the board. Despite its lower close, the ratio of advancing to declining volume ended at a plus 1.4 to 1 on the Nasdaq. The NYSE saw the day end with the ratio at a plus 2.1 to 1. Market internals point to an accumulation day on the NYSE, while the Nasdaq narrowly avoided a distribution day.

Last Thursday, the SPDR S&P Regional Bank ETF (KRE) set a higher low, as it formed a reversal candle on bigger volume. Further, it tested and held support of its 20-day MA. A move above the two day high of $28.78 could present a buying opportunity in this ETF.



On March 29, the iShares Dow Jones Select Dividend ETF (DVY) formed a reversal candle on a big burst of volume. In addition, it tested and held support of its 20-day EMA. On Friday, DVY offered an early pullback entry as it rallied above Thursday's reversal candle. However, DVY also offers a buy entry over Friday's high of $56.07. Alternatively, DVY could pull back once more and provide another pivot entry point. We are monitoring this ETF carefully for a possible long entry trigger.



We like the way the major indices finished the week as they showed signs of recovering from distribution early in the week. Still, the market has struggled recently and we must be mindful of further distribution. We would like to see a big accumulation day early this week as confirmation that bulls are still firmly in control of 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.