With the market now in short-term correction mode, Deron Wagner wants to stay on top of ETFs that showed the most relative strength during the uptrend, then determine proper entry points to buy them on pullbacks to support.

In the short-term, Deron Wagner still believes the overall odds favor a significant stock market pullback, possibly led by the Nasdaq, over the possibility of making another leg higher.

If the U.S. dollar continues to soften, Deron Wagner believes that commodity ETFs could become the next leaders in the intermediate-term.

All the major indices closed in the bottom quarter of their intraday ranges.

A bit of leaked news initially led to a positive reaction in the banking sector yesterday, but it's still prudent to be prepared for any shocks to the system.

Tuesday's lack of broad-based direction was likely attributed to nervousness ahead of Thursday's public release of the results of the financial "stress tests" conducted by the government last week.

Bottom line is this market is so strong that it has ignored key resistance levels one could normally bank on.

After eight consecutive weeks of gains in the Nasdaq, the overall risk/reward for new buy entries in the broad-based ETFs is not that favorable at current levels.

It's not a bad time to lay low, maintaining a large cash position until the market makes up its mind.

It's a good time to keep your powder dry until stocks decide whether they want to continue correcting to the downside, or forget about it and just resume their recent uptrends.