For now, Deron Wagner writes, he can only know what the charts tell him; most of the major indices are putting in short-term bounces within the context of their intermediate-term downtrends.

In order for the current rally attempt to have legs, Deron Wagner writes, the major indices should not retrace more than about one-third to one-half of last week's gains. If a retracement deeper than 50% occurs, overall momentum could quickly shift back to the downside.

The Biotech Index ($BTK) is another industry showing relative strength to the broad market. The index may take a rest for a few days to absorb its recent gains, but Deron Wagner writes that a subsequent breakout above yesterday's high would be bullish.

Deron wagner writes that in the short to intermediate-term, the overall market bias is now likely to favor the bullish side.

Given the current market conditions, buying and holding anything for more than a day or two is a risky proposition. Nevertheless, one benefit of the international ETFs, and INP in particular, is that they are not directly correlated to the direction of the U.S. markets.

A sustainable bounce will eventually come. But in the meantime, don't try to be a hero by blindly guessing a bottom without having any obvious signs of such.

Until he begins seeing the emergence of new leading stocks at fresh 52-week highs, it's hard for Deron Wagner to get excited about buying the market for anything more than a short-term bounce.

The market will eventually recover, but capital preservation must be your top priority right now so that you can put your cash to work when the buying opportunities begin presenting themselves again.

Deron Wagner writes that, although the probe below the prior low could be construed as beneficial for the market, all bets are off if the Nasdaq subsequently closes below its 200-day MA in today's session.