If the broad market and volume cooperate, the Ultra Financials ProShares ETF (UYG) could see a healthy rally.

Recently, there has been a noticeable flow of money into ETFs that have significantly lagged the market over the past year. This is often a leading indicator that a rally may be nearing exhaustion.

Although the market has been moving to new highs, the move has lacked conviction. Deron Wagner is beginning to find a significant number of short setups from the daily scans.

Turnover was decidedly down across the board on Monday. For the seventh consecutive session stocks meandered in a tight range.

Head and shoulders patterns, when analyzed correctly, are a powerful technical trading pattern, and one of Deron Wagner's favorites.

With triple witching options expiration upon us, it will be interesting to see if today's action can shake the market loose from five consecutive days of consolidation. Overall, market activity has been noticeably light for an options expiration week.

All the major indices remain in an uptrend and the price action suggests consolidation. But leading ETFs appear to be losing relative strength and market internals have been poor. Also, market laggards are taking leadership roles, often a bearish signal. When mixed signals abound, it's generally best to take a protective stance.

Although the Dow has set a new 52-week closing high, the market remains lethargic. This is most likely attributable to weak market internals and waning leadership.

If recent market action maintains form, Deron Wagner would expect to see a Dow-fueled, broad market rally soon. But given the recent pullback of the bond market into key support, a few days of consolidation or selling would not be unusual.

The market appears as if it may rally for the balance of the year. A breakout in the Dow and an increase in market volume would probably confirm this opinion.