Stocks posted solid gains on Wednesday, as trade quickened. The advance was led by the Nasdaq. By the closing bell, the tech-rich index had posted a 1.1% gain. The Dow Jones Industrial Average tacked on 0.8% while the S&P MidCap 400, S&P 500 and small-cap Russell 2000 all improved by 0.7%.

For the second time in as many days, market internals were bullish. Volume increased on the Nasdaq by 2.3% and on the NYSE by 1.9%. The ratio of advancing volume to declining volume was positive on both exchanges. On the NYSE it ended at 1.6 to 1 and on the Nasdaq at 2.2 to 1. The combination of positive price action and higher volume suggests that institutions were active in the market yesterday. Based on this action, we would label yesterday, an accumulation day for both the Nasdaq and the NYSE.

UUP has been in an uptrend for approximately nine months. Since it is in an uptrend, we would potentially look to enter UUP only on the long side. With this in mind, UUP could offer a buying opportunity on a pullback. Since topping out on July 12th, UUP has been selling off for the past four sessions, and is now closing in on support of its 20-day EMA. Whether or not UUP is a buy entry at the 20-day EMA or 50-day MA remains to be seen, but there is no need to predict anything as we simply wait for a low risk entry point to develop.



UNG triggered a long entry for us yesterday and performed well throughout the day and closed near session highs. Further, volume increased dramatically in UNG which helped fuel its move higher and points to institutional involvement in the move. The market put in another accumulation day, but we are still waiting for a confirmation day to provide the first sign that the current move higher is sustainable.

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.