Despite the pullback that began last Wednesday, it was only the first weekly decline of the past five weeks. Further, there has only been one confirmed "distribution day" during the same period.

Last Thursday, one day after the first significant broad market decline in more than a month, we targeted two ETFs with relative strength for potential pullback entry in the event of follow-through bearish momentum the following morning. Both setups of Guggenheim Solar ETF ($TAN) and Market Vectors Semiconductor ($SMH) triggered our pullback entry prices and have been looking good since then.

The rather volatile $TAN is already showing an unrealized gain of 6.0% since our May 23 buy entry of $23.45 (where we grabbed some shares on a pullback to the 10-day MA). From here, we would ideally like to see the ETF build a base of consolidation near the highs, then breakout to a new high within the next several weeks.

The other trade we entered last Thursday was $SMH, which we swiped as it pulled back to test substantial near-term support of its 20-day exponential moving average for the first time since its breakout. The following day, $SMH formed a bullish "hammer" candlestick and closed above its 20-day EMA for the second straight day. Take a look:



Based on the healthy pullback of $SMH that is holding the 20-day EMA, the ETF should be well positioned to climb back to the highs as long as the broad market holds steady. If we get a little bit of help from the market, in the form of a bounce this week, $SMH should be among the first industry sector ETFs to outperform due to the relative strength $SMH was exhibiting on the way up.

On May 6, iShares Malaysia Index Fund ($EWM) gapped up 6% to a fresh all-time high. Since this was a confirmed "breakaway gap," we have been stalking this ETF for the past several weeks, waiting for a base of consolidation to form and the moving averages to rise up and provide support. Last Friday, $EWM gapped down to "undercut" support of its 20-day exponential moving average:



From here, we will be watching to see if $EWM forms some sort of bullish reversal bar and closes back above the 20-day EMA. If it does, it could present a possible buying opportunity the following day (above the prior day's high). For now, it is not actionable on today's watchlist, but we will be sure to notify subscribers of our nightly swing trade newsletter if/when we decide to buy as an "official" swing trade on our watchlist.

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.