Stocks got off to a positive start last Friday morning, initially positioning the broad market for a strong finish to the week, but the major indices drifted lower throughout the day, causing them to finish with mixed results. The Nasdaq Composite advanced 0.8% and the S&P 500 gained 0.3%, but the Dow Jones Industrial Average slipped 0.3%. The small-cap Russell 2000 outperformed with a 1.5% gain, as the S&P Midcap 400 climbed 0.7%. All the main stock market indexes finished in the bottom quarter of their intraday ranges.

Turnover surged higher across the board last Friday, but the faster pace was likely attributed to "quadruple witching" options expiration day, the quarterly event in which contracts for stock index futures, stock index options, stock options, and single stock futures simultaneously expire. Total volume in the NYSE rocketed 49% above the previous day's level, while volume in the Nasdaq swelled 15%. The accelerated trading enabled volume levels in both the NYSE and Nasdaq rise above 50-day average levels for the first time in a month, and also enabled both S&P 500 and Nasdaq Composite to register a bullish "accumulation day." However, if not for "quadruple witching," which usually causes volume to rise, turnover in both exchanges may not have increased at all.

Last Friday, we pointed out the potentially buyable pullback that was occurring in SPDR Gold Trust (GLD), as well as Market Vectors Gold Miners (GDX). Going into this week, we continue to monitor the performance of those ETFs, and will be looking for a possible buying opportunity. Additionally, we're keeping an eye on the performance of GLD's shiny cousin, iShares Silver Trust (SLV):



Until recently, spot silver was lagging and showing relative weakness to the performance of gold. But last week, SLV played "catch up" by rallying more than 5%. GLD, by comparison, gained only 2.3%. Further, we like how SLV has pulled back to support of its recent breakout level (the dashed, horizontal line), providing a low-risk buy entry. We're planning to buy SLV on a rally above its December 19 high, as a break above that short-term hourly downtrend line will increase the odds of a resumption of last week's breakout.

In each of the past two weeks, most of the major indices have formed "doji star" candlestick patterns, which are indicative of indecision. This is shown on the weekly chart of PowerShares QQQ Trust (QQQQ), a popular ETF proxy for the tech-heavy Nasdaq 100 Index:



A "doji star" candlestick forms when the opening and closing price of a stock or ETF are roughly equal. The length of the upper and lower "wicks" can vary. This pattern is indicative of a tug-of-war between bulls and bears, with neither party winning in the end. In the case of QQQQ, its moved above and below last week's opening price, but eventually finished the week near the opening level. The presence of two consecutive "doji stars" on the weekly charts of most of the stock market indexes tells us the major indices have been in a "holding pattern" for the past two weeks. A look at the shorter-term daily chart of QQQQ will explain why:



Since December 8, the 20-day exponential moving average (the beige line) has acted as support for QQQQ, while the 50-day moving average (the teal line) has provided resistance. This has caused the price of QQQQ to oscillate in a relatively tight, sideways range for the past two weeks. But with the 20-day EMA and 50-day MA now converging on the price of QQQQ, we should soon see resolution in one direction or the other. A close above the December 9 high of 30.83 should trigger substantial upside momentum in the intermediate-term, while a close below the December 12 low of 28.47 could easily reignite the bears. Since the S&P 500 and Dow Jones Industrial Average have similar chart patterns to the Nasdaq 100, there really isn't much to do until stocks clearly resolve themselves in one direction or the other. Unfortunately, with the holidays fast approaching, turnover will start slowing to a crawl, creating further speculation about how the stock market will kick off the new year.

HOLIDAY SCHEDULE: The U.S. stock market will close early, at 1:00 pm ET, on Wednesday, December 24, close the entire day on Thursday, December 25, then return to a normal schedule on Friday, December 26. As such, an abbreviated version of Market Plot will be published on December 24, no publication will occur on December 25, and regular publication will resume on December 26.

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.