The ProShares UltraShort Basic Materials ETF ($SMN), an inversely correlated "short ETF," is now on our radar screen for potential swing trade buy entry, as the ETF is poised to break out above resistance of a six-month downtrend line. The technical setup is shown on the daily chart of SMN below:



Since mid-September of this year, SMN has formed two "higher lows," which hint at an intermediate-term bullish trend reversal (which is obviously bearish for the underlying index). Yesterday (November 5), SMN spent the duration of the session consolidating near the previous day's high, which also was in the area of both its 20-day exponential moving average (beige line) and 50-day moving average (teal line). If SMN rallies above yesterday's high, it will represent a breakout above its downtrend line from the June 2012 high, as well as its 20 and 50-day moving averages, which should spark momentum to send SMN sharply higher in the near-term. Regular subscribers of The Wagner Daily should note our exact entry, stop, and target price for this swing trade setup on the ETF Watchlist section of today's newsletter.

The Direxion 20-year Treasury Bull 3x ($TMF), which we are currently long in our model ETF trading portfolio, gapped up nicely yesterday to close right at its 50-day moving average. Furthermore, it finished just shy of its prior high from late October (the day of our buy entry). From here, the trade will be in good shape if it rallies above yesterday's high. New subscribers, or those of you who are missed our initial buy entry, may consider buying TMF on a rally above yesterday's high, as that would constitute a valid secondary buy entry point:



Our other open ETF position, Global X Silver Miners ETF ($SIL), closed slightly lower yesterday, but is still holding near its highs and with a bullish pennant formation. With the 50-day moving average rising up to meet support of its current price, we still expect SIL to soon break out of its range and rally to new highs:



Our remaining open ETF position is ProShares UltraShort Real Estate ($SRS), a "short ETF" which triggered for buy entry from yesterday's ETF watchlist. On an intraday basis, SRS put in a good rally attempt yesterday, but drifted back down to close just above our entry point. Nevertheless, we still like the trade setup and anticipate higher prices in the near-term, barring a sharp and sudden reversal higher in the broad market.

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.