After forming a bullish reversal candle on big volume last week, PowerShares Dynamic Building & Construction ETF ($PKB) has cleared the 10-week moving average and the prior week's high, which is a buy signal:



On the weekly chart, we see no real distribution at all over the past several months, which is a great sign. $PKB is sitting just below all-time highs, so it is a potential breakout on multiple time frames.

After undercutting a 6-week low and the 10-week MA early last week, iShares Spain ETF ($EWP) put in a bullish reversal candle with a close at the highs of the week:



A move above last week's high is a buy signal on the weekly chart. As such, we are placing $EWP (as well as $PKB) on today's watchlist for potential swing trade entry. Regular subscribers of The Wagner Daily should note our exact entry, stop, and target prices for these trade setups in today's report.

Given the strength of this week's price and volume action in the Nasdaq Composite, our market timing model is now back in buy mode.

The small-cap Russell 2000 reclaimed the 50-day MA, leaving the Dow Jones as the only major average yet to return above the "line in the sand" average. We call the 50-day moving average our line in the sand during a bull market. Stocks and ETFs above the 50-day remain on our internal watchlist, while those below are removed.

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.