We continue to see bullish setups from our stock and ETF scans, but most charts could use a short-term pullback to produce lower-risk entry points. As such, we are now just focused on building our watchlist, rather than aggressively entering new swing trades at the moment. Patience is key here.

iShares S&P Global 100 Index ($IOO) is currently in base mode, and has recently set a second higher swing low within its base.

The ETF is also showing back to back bullish reversal candles that undercut, but closed above the 10-week moving average. The moving averages look to be in good shape as well, as the 10-week is above the 40-week, and both are trending higher.

Volume has died down since the first selloff in June, which is a good sign when a stock or ETF is consolidating. A pullback to the 10-week MA (around $72) would be an ideal, low risk entry point, rather than climbing aboard on a breakout above $73.50. Note that $IOO is not on today's official watchlist, but we will continue to monitor its price action:



After a 33% rally from its last base breakout at $15, Global X Social Media Index ETF ($SOCL) has been building a base for the past few weeks.

The first pullback to the rising 10-week MA after a strong breakout is usually an area that is supported by institutions, and we clearly see that last week. Notice that $SOCL dipped below the 10-week MA, but closed back above it by the end of the week.

The base looks like it needs a few more weeks of consolidation, which should hold above $19, minus a few shakeouts. We will continue to monitor the action for a low risk entry point off the 10-week MA:



Wall Street continues to be held hostage by Congress, and the media does a great job of building up that fear with its non stop coverage. Still, we try our best to ignore it because it's way more constructive to focus on the price and volume action of leadership stocks.

Some leading stocks were hit last week, but recovered late in the week along with the broad market averages. If true market leaders begin breaking down below their 50-day moving averages on a pick up in volume, then we will know the market is in trouble. Whether this happens next week, or in two months from now, what causes the selling is not nearly as important as the selling itself.

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.