Equities moved higher on Thursday on higher trade. The small-cap Russell 2000 had the best performance yesterday, as it tacked on an impressive 1.3%. The Dow Jones Industrial Average added 1.2%, while the S&P 500 improved by 1.1%. The S&P MidCap 400 tacked on 0.8% while the Nasdaq exhibited the most relative weakness, as it posted a modest 0.6% gain.

Yesterday, on a burst of volume, the iShares Nasdaq Biotechnology ETF (IBB) undercut its 20-day EMA but reversed to close near session highs. A move above the three day high of $123.94 could provide a buy entry trigger in this ETF. We are placing IBB on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.



The battle between bulls and bears continues. Following Wednesday's bearish distribution day, the price action shifted in favor of the bulls yesterday. All of the major indices remain in their respective six day trading ranges. The S&P MidCap 400 and the small-cap Russell 2000 continue to lag the other indices and the DJIA is showing the most relative strength. Yesterday, the Dow rallied above the five day range before re-entering its trading range into the close. The market has been winding up like a top over the past three days, and we would not be surprised to see resolution of the standoff between bears and bulls on Friday.

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.