If stocks build on yesterday's bullish momentum, causing the main stock market indexes to overcome key resistance levels, Deron Wagner will be ready to selectively jump back into the long side of the market.

The S&P 500 remains below the "neckline" of its dominant head and shoulders pattern, and unless that changes, investors could expect a continued neutral to downward bias in the short-term of the broad market.

Overall price action of the past two days has simply been "noise" within the context of a bearish, intermediate-term pattern that's trying to work itself out.

Since there is a lot of speculation floating around as to whether or not the economy has really turned the corner, traders will be closely watching the numbers for this quarterly earnings season.

The possibility of a drop all the way to the March 2009 lows is not entirely out of the question.

Unless stocks follow through with a solid round of gains off yesterday's bullish reversal, the short-term trends remain bearish.

The possibility exists that the market will surprise us by quickly snapping back to recover last Thursday's losses.  But even if it does, sectors and ETFs with relative weakness should recover at a much slower pace, and with less intensity, than the main stock market indexes.

The healthcare sector continues to show the most promise on the long side right now, but commodity based ETF's have struggled to bounce higher after selling off sharply last month and may be ready for another leg down.

The reality is a 50% retracement would actually be quite beneficial for the longer-term health of the overall market.

Deron Wagner continues to be focused on the newfound resilience and relative strength of the healthcare sector.