After two straight days of large gains, the major indices entered into a healthy, sideways consolidation that allowed stocks to finish with mixed results. The S&P 500 gained 0.7% and the Dow Jones Industrial Average rallied 0.4%, but the Nasdaq Composite slipped 0.5%. Small and mid-caps showed relative strength again, as the Russell 2000 and S&P Midcap 400 indices gained 1.5% and 1.9% respectively. All the main stock market indexes closed just above the middle of their intraday trading ranges.

Turnover receded across the board, which is bullish when stocks are digesting a round of strong gains. Total volume in the NYSE decreased 12%, while volume in the Nasdaq similarly eased 12% below the previous day's level. The lighter trade tells us investors were not interested in following the previous two days of gains with heavy selling into strength. Market internals were mixed. In the NYSE, advancing volume exceeded declining volume by a margin of just under 2 to 1. The Nasdaq adv/dec volume ratio was negative by only 3 to 2.

Two days ago, the spot gold continuous futures (@YG) contract broke out above resistance of its 50-day moving average, carrying our position in Double Gold Long (DGP) along with it. Now spot gold is consolidating in a tight, sideways range, just above its 50-day MA. As such, we now expect gold to make another leg higher in the near-term. Since the gold futures contract trades around the clock, but DGP does not, we've shown the daily chart of spot gold below:



Yesterday, CurrencyShares Japanese Yen (FXY) maintained its current uptrend by perfectly bouncing off support of its 20-day exponential moving average. As such, we remain long that position, and will trail our protective stop higher after FXY moves above its short-term consolidation:



Many of the inversely-correlated ProShares UltraShort ETFs have pulled back to support of their 20-day EMAs. While this normally would be an ideal level to buy them, recall that their retracements off the highs corresponds to the major indices rallying into resistance of their October 2008 lows. But rather than immediately heading south after testing such a pivotal level of resistance, stocks have begun consolidating instead, giving us reason to believe there's a decent shop of another leg higher in the near-term. As such, it probably a good idea to lay off any new entries in the UltraShort ETFs.

NOTE: The U.S. markets will be closed Thursday, November 27, in celebration of Thanksgiving Day, and will finish at 1:00 pm ET on November 28. Accordingly, The Wagner Daily will not be published on Thursday, and an abbreviated version will be sent on November 28. Enjoy the holiday with your family and friends.

Open ETF positions:

Long - DGP, FXY, FXE
Short - (none)

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and Morpheus Trading Group, a trader education firm launched in 2001 that provides daily technical analysis of the leading ETFs and stocks. For a free trial to the full version of The Wagner Daily or to learn about Wagner's other services, visit MorpheusTrading.com or send an e-mail to deron@morpheustrading.com.