After breaking down below a significant support level at $25 earlier this year, iShares Silver Trust ($SLV) formed a five-month consolidation pattern at the lows. After a few months above the 50-day moving average, the price action cracked below the 50-day MA in early November and broke the uptrend line.

Now, the 20-day EMA is below the 50-day MA, and the 50-day MA is sloping lower as well. The 200-day MA also remains in a clear downtrend, so all the moving averages are in the correct order to indicate a confirmed downtrend is in place:



The daily chart above shows the declining 20-day EMA (around $20.80), so if $SLV can push higher, the 20-day exponential moving average could potentially provide us with a low-risk short entry point.

With $SLV breaking below the swing low from 10/1/13, it is now "too obvious" of a short entry, so we believe the ETF is due for some sort of bounce over the next week or two.

After a strong move off support of the l0-week moving average in late October, Financial Bull 3x ($FAS) has basically traded in a tight range on light volume. This week, the shorter-term 10-day MA caught up to provide support:



The light volume in $FAS over the past four weeks is a bullish sign, especially after two weeks in a row of heavier than average volume off the lows. With a close above $82, we would look for $FAS to resume its uptrend after a 15-week consolidation.

We now have five open long positions in the ETF portfolio, with three of those positions highly correlated to the movement in the S&P 500. We will look to add more exposure next week as new setups emerge.

The stock market is picking up steam again, and that is a good sign, but the leading stock portion of our timing model is lagging a bit. Still, we remain bullish, as the majority of leading stocks continue to form bullish basing patterns.

For the time being, money has flowed out of the Russell 2000 and NASDAQ and into the S&P 500 and Dow, which is a defensive move. However, it could simply mean that the Russell and NASDAQ need a few weeks of rest before taking the lead once again. Risk still seems to be on to some degree, as the Midcap S&P 400 has made new highs.

Broad based averages may continue to lead while higher beta issues take a break. Although we are on buy mode, there is the potential for more leadership stocks to break down over the next few weeks. We must remain patient to avoid overexposure to the long side, especially since our focus on the individual stock side is on small and mid-cap growth and momentum names.

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.