Our nightly stock scans have dried up over the past few days (no ideal technical trade setups), which is normal when a market is near-term extended. Ideally, we'd love to see a 2-3 day pullback on light volume in the S&P 500, or at the very least, a few days of sideways price action to produce low-risk buy entry points. As detailed in yesterday's commentary, we will remained positioned on the long side of the market as long as leading stocks and ETFs continue acting well.

Although our stock screening of the past two nights has failed to produce much in the way of immediately actionable trade setups, swing traders may want to keep iShares MSCI Indonesia ($EIDO) on their watchlist as a potential buy entry in the coming weeks. As you can see on the longer-term weekly chart below, notice that $EIDO has been consolidating in a tight range, after breaking out above a one-year downtrend line:



In addition to the tight price action over the past six months in the $30.00 to $31.00 range (which is bullish), notice the sequence of "higher swing lows" the ETF has been setting since May of last year (as annotated on the chart). The longer a base of support develops (consolidation mode), the more explosive the price action should be when the equity eventually breaks out above its range. However, one problem with longer price consolidations is that they may not breakout in time to participate in the current rally in the broad market. The odds of substantial upside gains would therefore be limited if the breakout is not in sync with the overall near to intermediate-term trend of the major indices.

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.