Deron Wagner writes that there's been no technical reason to suggest it's time to jump back on the short side of the market.

A test of the February 2009 highs could provide an ideal exit point to sell any short-term positions into strength, or at least trail protective stops more tightly.

Deron Wagner expects to get a much better feeling for the stock market's true strength or weakness after traders return from the holiday weekend, especially as more quarterly earnings reports are released.

Despite the losses of the past two days, Deron Wagner notes that the major indices remain in short and intermediate-term uptrends.

There are two reasons it may be a good idea to lay low throughout the rest of the week, focusing on managing existing positions, rather than entering new ones.

The Nasdaq 100 is the only index already trading at its 2009 high, and Deron Wagner writes that trades in Nasdaq-related (mostly tech) sectors now have better odds of yielding profitable results than many "old economy" sectors that primarily comprise the Dow.

Deron Wagner anticipates further strength in energy shares, so he'll keep his stops a bit loose for now.

If the $OSX Index shows strength in the coming days, the corresponding ETF with the most similar chart pattern is Oil Service HOLDR (OIH).

Deron Wagner notes that mixed signals are pointing to the likelihood of a period of sideways consolidation over the next one to three weeks.

The market is acting as though the current pullback may be short-lived. However, because the stock market may still need to run its course with another day or two of selling, it's always safer to wait for some type of price confirmation before buying any broad-based ETFs on this pullback.