The Nasdaq Composite regained support of its 50-day moving average on higher volume yesterday, which was the first clear sign of accumulation in a few weeks. There was some selling in the final 45-minutes of trading, as the Nasdaq pushed into resistance from prior swing highs of the past six weeks.

The big question now is can the Nasdaq hold the 50-day MA and push through the 4,170 - 4,185 resistance level next week, without printing another bearish distribution day?

Transports continue to press higher, but the current light volume advance to new highs on wedging price action is not very inspiring.

The key here is to watch the current uptrend line for a break, which would be a bearish sign:



Vanguard Europe ETF ($VGK) has formed a tight trading range just below the highs of the current base in May.

The price action in the range has held above the rising 20-day EMA. For the most part, the current base held support of the rising 50-day MA minus a few shakeouts, which is bullish. The 20ema is now clearly above the 50ma, and the 200ma is still in a strong uptrend:



The recent false breakout in $VGK led to a six-day pullback, which undercut the 20-day EMA twice. The price action quickly returned back above the 20-day EMA, which is what we want to see after a shakeout.

We are placing $VGK on today's watchlist for potential swing trade buy entry. Subscribing members of our swing trading newsletter should note our exact entry, stop, and target prices for this trade setup in today's report.

With high quality growth stocks no longer leading the market, it appears as though the current rally attempt is running of fumes.

It's tough to compare current conditions to any point in 2013, as there were plenty of growth stocks in early stage bases to be found during every market pullback.

That is clearly not the case now, as many top leaders have cracked and others are very late stage and do not have much left in the tank.

The plan is to play this market for what it is..... a late rally attempt in an extended bull market that is losing steam.

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.