After seeing positive territory for much of the day, stocks came under late day pressure to close mixed. Trade was also mixed. The Dow Jones Industrial Average, small-cap Russell 2000 and the S&P MidCap 400 ended the session up by 0.5%, 0.2% and 0.1% respectively. The day's worst performer, the Nasdaq, ended the day down by just over 0.3%. The S&P 500 closed fractionally lower.

Market internals ended the day on a mixed note. Volume increased on the Nasdaq by 1.3% but fell on the NYSE by 2.7%. Advancing volume ended at par with declining volume on the NYSE, while on the Nasdaq, advancing volume outpaced declining volume by a factor of 1.4 to1. Despite the fact that the Nasdaq closed lower on the session, it is interesting to note that advancing volume topped declining volume on the day.

Yesterday, on an uptick in volume, the Direxion Daily China Bear 3x ETF (YANG) formed a bullish engulfing candle, as it gapped down, held support of its trendline and the 20-day EMA, and reversed to close at session highs. Further, it marked the second consecutive day that YANG formed a bullish reversal candle. A volume propelled move above the two day high of $17.75 could present a buy entry trigger in this ETF. We are placing YANG on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.



Since early-June of this year, the ProShares UltraShort Basic Materials ETF (SMN) has made three attempts to break above resistance near $18.50. Over the past two sessions, this ETF has attempted to crack above this level for the fourth time. With each touch of a resistance level, the odds increase that the level will be broken. If SMN can find its way above this key mark on a burst of volume, this fourth test of this level could be what is needed to propel SMN to a fresh six month high.

 

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.