The broad market averages basically chopped around all session on light volume, closing with modest gains across the board. With only one distribution day on board, the volume pattern in the market remains quite bullish. This means that although the market could pull back in for a few days, we would expect any selloff to be short-lived and a buying opportunity.

After a few months of selling action, buyers have finally stepped in to gold and silver stocks off the lows. We are trend traders and prefer to see confirmation of a new trend emerge before we take any action. For example, before we enter a stock/ETF we look for the 50-day MA to be in an uptrend and near or above the 200-day MA, which should at the very least be flattening out (not going lower). Both gold and silver ETFs are still in a clear downtrend, with the 50-day MA yet to turn up, so it is simply too early for us to get involved.

Looking at the monthly chart of Global X Uranium ETF ($URA), we could potentially see a reversal of trend by the end of the month if the price action can close above the two-month high and the downtrend line.



Dropping down to the weekly chart, $URA has broken the downtrend line but has yet the clear the prior highs of June. We talked about the 50 and 200-day MAs confirming a reversal of trend on the daily chart in gold and silver, and we can do the same analysis on the weekly chart with the 10 and 40-week MAs in $URA. The 10-week moving average has flattened out and is trending higher the past two weeks, which is a good sign; however, the 40-day MA needs to flatten out, as it is still trending lower and the 10-week MA is still well below the 40-week MA. This setup is not actionable right now, but it is worth monitoring over the next few weeks.



Adds in $TAN and $IHI followed through to the upside. If $FDN closes below the 10-day MA we will be forced to raise the stop to lock in profits on partial size. The remaining shares will be held with a stop below the 50-day MA. Stay tuned for any changes.

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.