A choppy, indecisive of trading yesterday made us pleased to be in "SOH mode" (sitting on hands). Showing significant divergence amongst the major indices, stocks finished with mixed results. After bouncing around in a sideways range, the Dow Jones Industrial Average eked out a gain of 0.1%. However, a weak performance from the tech arena held the Nasdaq Composite down, causing the index to finish 1.2% lower. The benchmark S&P 500 Index declined 0.3%. Both the small-cap Russell 2000 and S&P Midcap 400 indices fell 1.1%. The Dow closed just below the middle of its intraday range, but the rest of the market indexes settled near their lows of the day.

Turnover in the NYSE was on par with the previous day's level, but total volume in the Nasdaq ticked 3% higher. Monday's negative session saw heavier volume in the NYSE, but lighter volume in the Nasdaq. Yesterday, the Nasdaq played "catch up" to the weakness in the S&P by registering another "distribution day" as well. In both exchanges, volume marginally exceeded 50-day average levels. The NYSE advancing/declining volume ratio was negative by just 2 to 1. However, declining volume in the Nasdaq exceeded advancing volume by a ratio of more than 6 to 1.

While scanning our workspace that illustrates the relative strength or weakness of various industry sectors, we observed most industries have been falling on pace with, or faster than, the S&P 500 over the past week. But one sector showing notable relative strength is oil. Over the past ten days, the S&P 500 has lost 0.6%, but the ARCA Oil Index ($XOI) has actually gained 3.2% during the same period. This is shown on the "percentage change chart" below:

Even though oil has been showing relative strength to the broad market, the sector is still on a near-term pullback from its recent high. This creates potential buying opportunities in several of the oil-related ETFs. While the S&P 500 has fallen below its 20-day exponential moving average, as well as its prior high from last month, most of the oil ETFs are still above their 20-day EMAs and September highs. For near-term "swing trades," a nice entry point in most of these ETFs is just above yesterday's high.