On a technical level, yesterday's price action was indicative of essentially nothing but a lack of commitment, and can be clearly seen on the daily chart patterns. Each of the major indices formed an inside day, which occurs when the intraday trading range is completely contained within the previous day's trading range. Furthermore, most of the main stock market indexes formed a doji star candlestick pattern. This forms when when the open and close for the day are the same, or nearly the same, and the intraday trading range on both sides of the open/close is narrow and roughly equal. Both the inside day and doji star patterns are shown below on the daily chart of the S&P 500 SPDR ($SPY), a popular ETF proxy for the benchmark S&P 500 Index ($SPX):



Since it was such an uneventful day, we'll keep today's ETF and broad market commentary concise. Not surprisingly, no new valid ETF trade setups were created, and our general near-term trading plan remains the same as was explained in detail in yesterday's analysis of PowerShares QQQ Trust ($QQQ). To recap, we continue building an internal watchlist of weak ETFs to sell short when they eventually bounce into formidable price resistance levels, then provide us with a trigger point for entry by forming a bearish reversal candle. So far, both $QQQ and $IBB are on that list, the latter of which we will discuss and analyze in tomorrow's newsletter.

For now, we remain well-positioned with five different open ETF positions in model trading portfolio, and four of those five positions continue to show unrealized gains. Note that US Natural Gas Fund ($UNG) is back on our "official" watchlist for potential buy entry today (regular subscribers to our swing trading ETF and stock picking service should note our exact trigger, stop, and target prices above).

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.