iShares MSCI Singapore Index ($EWS) has been in consolidation mode since mid-September. After finding support at the 200-day MA and rallying to but stalling at the prior high, the price action has pulled back to the rising 20-day EMA. We look always look for price action to tighten up within the base (this a bullish sign) and $EWS has done that over the past few weeks. The technical chart pattern of $EWS in shown below:



$EWS may need another week or two of sideways action before it is ready to breakout, but this setup may be ready to trigger within the next few days if broad market conditions continue to improve. Regular subscribers of The Wagner Daily should note our detailed trigger, stop, and target prices for this trade setup in the ETF Watchlist section of today's newsletter.

Stocks sold off late in the day yesterday, erasing all morning gains and closing in negative territory. The good news is that the losses were contained to the -0.3 to -0.5% range and volume was lighter on both the NYSE and Nasdaq. If the averages would have closed down 1% or more on higher volume and near the bottom of the day's range, that would have been a clear sign of stalling action and cause for concern. But Thursday's light volume retreat is normal action after such an explosive two-day advance in the market.

With the market avoiding distribution on Thursday, we continue to receive solid feedback from the price and volume action and see no reason to expect the current move out to fail. That being said, we try to keep it simple and shy away from predictions. Anything can happen in trading. Our goal has always been to react to price action rather than to predict.

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.