While the US market has taken a bit of a hit, BRIC ETFs have held up surprisingly well. Brazil, Russia, India, and especially China, have mostly ignored the selloff in the US market.

Guggenheim China Small Cap ETF ($HAO) has shown great relative strength lately, breaking out above resistance at $25 while the S&P 500 pulled back 5% off a recent swing high.

We like the bullish reversal candle that formed in $HAO last week, as it opened below the prior week's low and closed above the prior week's high. The price closed near the dead highs of the week as well:



On the shorter-term daily chart below, we see that the 50-day MA has crossed above the 200-day MA, which is a bullish intermediate-term buy signal.

Also, note that all major moving averages on the chart are in a clear uptrend, from the 10-day MA to the 200-day MA.

As such, we are placing $HAO on today's Wagner Daily watchlist for potential swing trade entry. Regular subscribers should note our detailed entry, stop, and target prices for the $HAO setup on today's report:



Per yesterday's plan, we sold half of our position in First Trust Natural Gas Index ($FCG) to lock in a 7% gain, and also raised the stop on remaining shares of the position. Our position in iShares Japan Index ($EWJ) long finally showed some life yesterday, as it bounced off the 50-day MA. The bounce could spark the next wave up if momentum builds.

On the individual stock side, we sold partial size in Yelp ($YELP) to lock in a 28% gain since our buy entry. We also sold half of our position in Infoblox ($BLOX) for a 4.0% loss, and Xoom Corp. ($XOOM) stopped us out with a 7.0% loss. Michael Kors ($KORS) and Ambarella ($AMBA) were closed at break-even.

We've been doing a lot of housekeeping over the past two days, both locking in gains of winning positions and cutting losses of losing trades. Overall, we've been pleased with the net profitable outcome (detailed more in the bottom half of this blog post that discusses how the tide may be turning for bulls).

Coming within the next few days, be on the lookout for an educational trading strategy article that details exactly how we netted a gain of 44% by holding Guggenheim Solar ETF ($TAN) for two months. When the article is completed, it will be posted on our trading blog.

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.