Equities posted modest gains on Friday on mixed trade. The small-cap Russell 2000 showed the most relative strength on the day, as it posted a 0.9% gain. The Nasdaq added 0.6%, while the S&P MIdCap 400 rose 0.4%. Both the S&P 500 and the Dow Jones Industrial Average added 0.2%.

For a second consecutive day, internals were mixed. Volume increased 0.6% on the Nasdaq but fell 3.2% on the NYSE. Advancing volume was higher across the board, as the spread ratio ended at a plus 1.4 to 1 on the NYSE and a plus 1.2 to 1 on the Nasdaq. Albeit modest, the Nasdaq posted a second consecutive accumulation day on Friday.

Since losing support of its 200-day MA on April 4th, the Vanguard MSCI Europe ETF (VGK) has rallied back into resistance of its 50-day MA. If VGK overcuts and forms a reversal candle at this key mark, it could present a short selling opportunity. We will be closely monitoring the price action in VGK for a possible short entry:



We opened a new long position on Friday, as VNM hit its buy trigger. Our open position in EPU moved above resistance of the three-day high but pulled back at resistance of its recent swing high formed on April 19th. A move above $46.50 could very well result in a sizeable move higher for EPU. Currently, both open positions are international ETFs, which provide the benefit of having a lower correlation to the direction of the U.S. stock market indexes than typical industry sector ETFs. Overall, last Friday's market activity was uninspiring, but could be expected following a three-day rally off the recent lows. We would also not be surprised to see a pullback today (Monday) and will be monitoring the severity of any potential selling activity as an indication of market strength.

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.