Despite three days of rallying, the outstanding short interest in the market continues to remain high.

Although yesterday's market action can justifiably be classified as a follow-through day, the lack of turnover puts into question the sustainability of the current advance.

The S&P, DJIA and NYSE all tested key support for the fourth time and held these levels yesterday. Consequently, it would not be a surprise to see a rally over the next few days.

Although some market leaders have held support over the past six weeks, if these remaining hold-outs begin to crack Deron Wagner would anticipate another significant round of selling in the broad market.

Despite the bearish action on Thursday, Deron Wagner is hesitant to make a call for a wholesale selloff today.

Volatility is generally a bearish signal. Sharp reversals and rapid advances like those over the past two sessions are generally unsustainable.

There continues to be an absence of market leadership and until this situation is corrected Deron Wagner will continue to pursue opportunities on the short side of the market.

For the current selloff to gain more credibility, the market would need a follow-through day on increasing volume.

After yesterday's price action the market appears primed for a move lower.

The market appears to be running out of steam, but it would be no surprise to see another run at Wednesday's highs prior to the market taking another leg down.