Although our market timing model is currently in "sell" mode, the great thing about ETFs in market conditions such as the present is the many different types of ETFs that allow traders to avoid having a high correlation to the direction of the US markets.

Presently, most of the best looking ETFs are international ETFs. More specifically, they are Asian ETFs. Going into today, one international ETF on our watchlist for potential buy entry is Guggenheim China Real Estate ETF ($TAO). On the weekly chart below, notice that $TAO broke out above a 3-month downtrend line last week, after coming to support of its 40-week moving average (approximately equal to the 200-day moving average). Yet, the ETF is still near its 52-week highs:



Zooming in to the shorter term daily chart below, notice that the breakout above the downtrend line occurred in the form of a sharp opening gap last Friday that enabled $TAO to close the day with a 2.8% gain. More importantly, last Friday's gap put $TAO back above its 50-day moving average:



Regular subscribers to The Wagner Daily should note our exact entry, target, and stop prices for this $TAO trade setup in the "Watchlist" section of today's report. Furthermore, there is another international ETF and one individual stock on today's watchlist for potential swing trade entry.

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.