The question whether we will bounce or not is not the issue. The big question is whether it will just be a dead cat bounce.
Surprisingly, this market has had its share of dead cat bounces in 2013. They tend to last anywhere from two to four days in length. So right now is not the time you want to be adding to your short positions if you are looking for an opportunity to get short this market. Instead I would wait at least until day three, which would be Thursday at the earliest. That way you have two solid days (likely) of the market bouncing followed by the overnight futures, and should the market gap up at all, you'll likely benefit on individual entries on your new short positions.
However, for me personally, I'm not shorting anything. There's no use in doing so. Yes the 10-Year treasuries are rising, and has a lot of folks in a tizzy, but quite honestly, until the Fed starts actually tapering, I'm not going to get really short this market.
With that said, it doesn't hurt for me to point out the setups that are looking most desirable from the list below.
Watch for the head and shoulders patterns that are developing on Canadian Pacific Railway (CP) and Angie's List (ANGI). Furthermore the dreaded J.C. Penny Company (JCP) tested resistance overhead this morning only to sell-off thereafter. As a follow up to last week check out the nice drop in Nordstrom (JWN) after it dropped more than 10% last week.
Finally, to the trolls who like to try and beat me up every week for keeping Arena Pharmaceuticals (ARNA) on the list, well, they are still on the list, and regardless of all your fundamental talk about them, their chart still royally sucks and I wouldn't be caught dead going long that stock.
Here's the rest of my short watch-list: