It was not surprising that the market only saw modest gains on Tuesday in the wake of Monday's impressive price move. However, it is noteworthy that institutional investors appeared to be accumulating stocks yesterday. Based on yesterday's market action, it looks as if there is more upside potential for the market.

Rallies on extremely light volume are suspect particularly when they are parabolic. Without institutional participation, moves of yesterday's magnitude are almost always unsustainable.

Despite the fact that the broad market trend remains bearish, there is currently a divergence developing between the S&P 500 and Nasdaq that suggests there might be another move higher.

A meager two-day rally in the broad market was met with significant selling pressure yesterday. Bears continue to set the tone for the market.

Deron Wagner would not be surprised to see the market rally for several days on the heels of a massive selloff.

The $SPX.X held support of the 200-week moving average, rallied sharply, and is now likely to test resistance at the 20-week and/or 50-week moving averages.

Deron Wagner maintains his bearish bias, although the market could find support at the current level. As such, caution is warranted for market Bears.

The market remains under pressure and the major indices are now testing their 10-day lows.

As market internals continue to erode, Deron Wagner's focus is on the short side of the market.

Many ETFs are now approaching resistance and it appears that more short setups are on the horizon.