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In today's fast-moving markets, it's not easy to develop a bearish or bullish stance and stick with it, especially when whipsaw action is commonplace. I use price and volume clues in the major stock indices to tell me when to be bullish and when to bearish, and recent market action has caused me to slant toward the bearish side. But don't get me wrong: I'm not expecting a bull-blown bear market to take shape. But I am expecting a short-term pullback before the bull run resumes. Recent U.S. economic data have been too good to ignore, but I also believe that the market needs to digest its recent gains a bit more.

On Wednesday, I established a long position in the ProShares UltraShort QQQ ( QID) at $51.75. Stocks opened strongly Thursday, putting pressure on the QID, which was trading 2.7% lower at $50.72 in early trading. Timing is everything in the market, and if my timing turns out to be wrong, I will cut losses short and move on. As I wrote yesterday, I tend to cut losses between 5% and 10% below my purchase price. One thing I'm good at is admitting when I'm wrong on a trade. However, after one day, it's too early to say my timing was wrong with the QID.

I outlined my reasons for buying the QID on Wednesday, and I'm sticking with the thesis for now. I noted some risks with the trade, namely that major stock indices were still holding above their respective 50-day moving averages, a key support level. Today, the Nasdaq is trying to make a case it will find support again at its 50-day moving average as it did in November before starting another leg higher.

If the market uptrend resumes, it would be silly to fight the tape. That's why I'm constantly on the lookout for bullish ETF setups. They're not abundant at the moment, but I am encouraged by the continued resilience of the Semiconductors Holders Trust ( SMH). The fund has total assets of $1.5 billion, holds 18 stocks and yields about 1.4%. Its three biggest weightings are Texas Instruments ( TXN), Intel ( INTC) and Applied Materials ( AMAT), accounting for about 50% of the fund's assets.

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