With most stocks and ETFs running higher while our timing model was on a "sell" signal, there are very few low-risk buy setups to be found. However, if the stock market is to stage a significant rally, we will eventually see new breakouts emerge. There should also be plenty of former breakouts pulling back to support, as a strong market should have decent rotation among leading industry sectors.

Right now, the key is to maintain discipline and patience by letting the chart patterns come to us.

$SPDR KBW Regional Banking ($KRE) has recently moved to new highs after a three-week pullback to support of its 10-week moving average on the weekly chart. The long-term monthly chart below shows $KRE attempting to breakout above its highs of a three-year trading range:



Drilling down to the shorter-term daily chart below, we see the price action during the pullback held new support of the prior breakout level, which is always bullish:



A close above the $31 area on the weekly chart, if accompanied by increasing volume, would serve as the buy signal for at least short-term trade entry. If this ETF meets our technical criteria for new swing trade entry, we will alert Wagner Daily subscribers in advance with our exact trigger, stop, and target prices for this momentum-based trade.

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.