Given the magnitude of yesterday's selloff, Deron Wagner is changing his market bias from bullish to neutral.

Deron Wagner's market bias continues to be bullish, but he is still patiently waiting for new leadership stocks to emerge.

Deron Wagner's market bias continues to be bullish but he is still waiting for new leadership stocks to emerge.

The more the market consolidates at the current levels, the more likely the next significant move will be higher.

The market continues to demonstrate resiliency. In the face of overwhelmingly negative news it continues to consolidate near the highs of this recent run.

The market appears staged for a move higher. In the face of very negative news it has been holding support .

The NYSE has now recorded a third distribution day and the Nasdaq a second distribution day since providing buy signals last week. This has made for a very difficult trading environment and appears suited mainly for day trading and one-day swing trades.

If Tuesday is a follow-through day to the downside, then traders will have to begin to seriously consider the possibility that the recent rally was nothing more than a bear market retracement.

Despite the bullish signal in the market, no new leadership stocks have emerged. Until they do, the possibility remains that the market could reverse quickly at the current levels.

Thursday was clearly an accumulation day across the board. Nonetheless, caution is warranted since reversal candles formed in several market sectors yesterday.