Since overall volume is trending lower as the S&P 500 tries to form a bottom, this is the exact opposite type of price to volume relationship the bulls want to see.

Deron Wagner likes how the market has been acting the past several days. Taking an updated look at the daily chart of the S&P 500, he notes how the index is now poised to break out above its 20-day exponential moving average (EMA).

It's still way too early to say new leadership in the market is developing; nevertheless, yesterday's stealth strength, especially in the small and mid-cap arena, was a good start to the market's latest reversal attempt.

Don't worry about missing the rally; if it's for real, there will be plenty more upside in the weeks that follow. Instead, remain on guard in case the market fools the bulls in the near-term.

There remains a strong chance stocks will just continue to chop around in the sideways ranges they've recently established.

In the pre-market, the S&P and Nasdaq futures are once again pointing to a decidedly lower open.

You need to focus on protecting capital during the tough times, in order to take advantage of the good times when they arrive again.

If Wednesday's lows are broken, there's a good chance a test of the October 10 lows will rapidly follow suit.

Tuesday was the S&P 500's tightest intraday trading range since October 1.

Deron Wagner is slightly concerned by Monday's low volume levels, but price action itself was very positive.