Stocks rallied sharply in the last half hour of the session, to stave off what could have been a second consecutive day of distribution. The late day rally was strong enough for stocks to end the session mixed. The NYSE added 0.2%, while the S&P 500 closed flat on the day. The Nasdaq sustained the biggest loss, as it fell 0.5%. Both the Dow Jones Industrial Average and the small-cap Russell 2000 fell 0.4%, and the S&P MidCap 400 dropped 0.3%.

As the S&P 500 has pulled back and undercut its 50-day MA over the past five days, the iShares Dow Jones US Real Estate Index ETF (IYR) has consolidated near its 52-week high and held support of its 10-day moving average. This demonstration of relative strength suggests that if the market reverses higher, IYR could be one of the first ETFs to set new highs. We will continue to monitor IYR for a possible long entry.



Since rebounding off support of its 50-day MA on July 3rd, the ProShares UltraShort Silver ETF (ZSL) has reclaimed support of the 20-day EMA and has been consolidating at this key mark for the past four sessions. A volume fueled move above the two day high of $70.90 could present a buy entry trigger for this ETF.



The intensity of the late session move suggests that institutions were in buy mode into the close. However, due of the lack of conviction in the market, we are inclined to remain cautious with respect to entering new positions.

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.