Stock closed mixed on Wednesday, on mixed trade. Despite finishing mostly lower yesterday, all of the major indices closed near session highs. The Nasdaq showed relative strength yesterday, as it was the only index to close up on the day. The tech-rich index closed fractionally higher. The Dow Jones Industrial Average slid 0.1%, while both the S&P MidCap 400 and the S&P 500 slid 0.2%. The small-cap Russell 2000 dropped 0.3%.

Over the past three weeks, the PowerShares DB US Dollar Bull ETF (UUP) has sold off and pulled back into support of its 50-day MA. Over the past two sessions, UUP has tested support at this key moving average. UUP offers a potential long opportunity above the two day high of $22.53. We are placing UUP on the watchlist. Trade details are available to our subscribers in the watchlist segment of the newsletter.



Our long position in IBB continues to act well. IBB showed bullish price action, as it tested Tuesday's low but recovered to close near the two day high. Although there was some selling pressure yesterday, for the most part, stocks closed near session highs. We consider yesterday's price action ideal, following four consecutive days of buying. Other than the S&P MidCap 400, all of the major indices tested and held support of their 50-day moving averages. The mid-cap index is the only one of the five that has yet to reclaim its 50-day moving average. We anticipate that the market may consolidate for a few more days before it takes another potential move 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.