Yesterday was pretty much a clone of every other day this week. Liking the punch of significant volume, stocks bobbed and weaved in a noncommittal fashion throughout the entire session before finishing near the flatline. Both the S&P 500 ($SPX) and Nasdaq Composite ($COMPQ) edged 0.1% higher, while the Dow Jones Industrial Average ($DJIA) was unchanged. Small caps continue to show a bit of life, as the Russell 2000 Index ($RUT) increased 0.4%. The S&P MidCap 400 was higher by 0.1%. Like the previous day, the main stock market indexes unenthusiastically closed near the middle of their intraday ranges.

Total volume in the NYSE was on par with the previous day's level. Turnover in the Nasdaq was 6% lighter. Again, trade remained below 50-day average levels. The last time volume in the NYSE exceeded its 50-day average level was on August 3. In both exchanges, advancing volume marginally exceeded declining volume, but it was nothing to write home about. As we approach this weekend's three-day holiday, we don't expect to see the return of institutional trading until at least next week.

In the August 21 issue of The Wagner Daily and on this blog post, we pointed out that the S&P 500 and Nasdaq indices had run into pivotal resistance of their four-year highs. That they, we suggested that at least a near-term pullback would likely occur before these indexes broke out to new highs. So far, that is exactly what is happening. Let's take an updated look at what has occurred in both indexes since then. Below is a the daily chart pattern of S&P 500 SPDR (SPY), a popular ETF proxy that tracks the S&P 500:



Notice how $SPY "overcut" horizontal price resistance of its high on August 21, then subsequently pullback to near-term support of its 20-day exponential moving average. On August 24, the index perfectly bounced off its 20-day exponential moving average, and has been chopping around in a tight, sideways range since then. Next, let's assess the price action of PowerShares QQQ Trust ($QQQ), the well-known ETF that follows the performance of the large-cap Nasdaq 100 Index (the brother of the broader-based Nasdaq Composite):



Like $SPY, $QQQ also probed above resistance of its high on August 21, and then retraced slightly lower. However, notice that $QQQ has been showing slight relative strength to $SPY because it never even pulled back to touch its 20-day exponential moving average, and still just a kiss away from breaking out to refresh high.

With most market participants sitting on the sidelines or on vacation right now, we do not anticipate any substantial price action to occur in the broad market until at least the passing of the Labor Day holiday. Furthermore, any significant price movement that does occur within the next two days is not to be trusted if it occurs on lethargic volume. For that reason, we are not targeting any new ETFs for potential trade entry today.

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.