Stocks slid lower on Tuesday, as they traded in a tight range for a second consecutive day. Trade was strong, as all the major indices closed near session lows. The S&P MidCap 400 put in the worst performance on the day. By the closing bell, the mid-cap index had shed 0.7%. The small-cap Russell 2000 fell 0.6%, while the Dow Jones Industrial Average and the S&P 500 dropped 0.5% and 0.4% respectively. The Nasdaq showed relative strength by containing losses to a moderate 0.2% yesterday.
Market internals were bearish yesterday. Declining volume held the upper hand on the day, as it outpaced advancing volume by a ratio of 1.9 to 1 on the NYSE and 1.6 to 1 on the Nasdaq. Volume spiked by 20.3% on the Nasdaq and 18.7% on the NYSE. The NYSE posted a distribution day yesterday, as a result of its weak price action and higher volume. Despite the higher volume, the Nasdaq narrowly escaped a distribution as it contained losses to less than 0.3%.
Yesterday, the Direxion Daily Gold Miners 3x Bear ETF (NYSEARCA:DUST) formed a bullish reversal candle as it undercut its 50-day MA and the two day low, but rallied to close near session highs. Further, this inverse ETF touched and held support of its uptrend line. A volume assisted move above yesterday’s high of $51.04 could present a buy entry trigger for DUST.
After testing the three day high yesterday, the Market Vectors Oil Services ETF (NYSEARCA:OIH) reversed to close near session lows. A loss of support at the three day low of $38.89 could present a shorting opportunity in this ETF. We are placing OIH on the watchlist. Trade details are posted in the watchlist section of the newsletter.