Friday was a strong day for Wall Street. Stocks moved significantly higher for the second straight day on Friday, but trade was mixed. Higher beta issues led the market higher, as the small-cap Russell 2000, Nasdaq and S&P MidCap 400 posted gains of 2.4%, 2.2% and 2.1% respectively. The S&P 500 advanced by a healthy 1.9%, while the Dow Jones Industrial Average improved by 1.5%.

Market internals ended the session mixed. Volume increased by 7.9% on the Nasdaq but faded by 1.5% on the NYSE. Although total volume was lighter on the NYSE, advancing volume overwhelmed declining volume by a ratio of 16.3 to 1. On the Nasdaq, advancing volume topped declining volume by a more modest 2.4 to 1. Friday's higher volume on the Nasdaq points to institutional buying. As a result, the Nasdaq has now posted back to back accumulation days. Friday's light volume on the NYSE eliminates any possibility of an accumulation day for this index.

Friday, on a burst of volume, the ProShares UltraShort Euro ETF (EUO) formed a bullish reversal candle and closed near session highs. EUO offers two possible long entries. The first possible long entry could occur if EUO rallied above the two day high of $22.16. Alternative, EUO could offer a potential buying opportunity if it were to sell off further and reverse at its 50-day MA. We will continue to monitor EUO for a possible buy entry.

 

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.