I believe the market should see a bounce this week. We have had two full weeks of very negative trading with a lot of put buying. This brings all the 10 day moving averages into oversold territory and generally that means the market has a tough time making downside progress.
While everyone seems negative right now if we manage a bounce I could already see everybody talking about a successful retest. At that time it would pay to reconsider the short side. But for this week my call is higher.
The wild card is that this week is expiration. Four weeks ago we saw record bullish positioning in the options market and that is a wild card.