Stocks ended the session mostly higher on mixed trade. The Nasdaq showed relative strength for the second consecutive day as it posted a 0.8% gain. Both the Dow Jones Industrial Average and the S&P 500 tacked on 0.3%, while the S&P added a modest 0.1%. The small-cap Russell 2000 was the sole loser on the session, as it slid 0.4%.

Thursday ended with mixed internals. Despite its relative strength, turnover fell on the Nasdaq by 4.6%, while the NYSE saw an uptick in volume of just over 11.0%. Advancing volume topped declining volume on the Nasdaq by a ratio of 1.5 to 1 and on the NYSE by a ratio of 1.1 to 1.

Following an undercut of its 50-day MA, on July 13th, the S&P Select Financial SPDR Fund (XLF) gapped up and reclaimed support of its 50-day and 20-day moving averages, on a burst of volume. Since that time, XLF has spent the last four sessions consolidating above support of its 20-day EMA. Further, on July 17th, XLF formed a reversal candle on another burst of volume (day-over-day). A move above the July 17th high of $14.78 could provide a buying opportunity in this ETF.



Since reversing off of its June 4th lows, the Market Vectors Indonesia ETF (IDX) has rallied into resistance of its 200-day MA and filled the gapped formed in May of this year. IDX could provide a shorting opportunity if it forms a reversal candle at the current level (See blue candlestick). Reversal candles demonstrate that the trend is weakening and provide a potential entry trigger. We will continue to monitor IDX as a possible short candidate.

 

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.