Stock markets are extremely shaky at this time, as investor sentiment on both the NASDAQ and broader markets has turned bearish. This is evidenced by the surge in new lows versus new highs.While the current market bias is negative, the recent streak of relatively low trading volume at below two billion shares daily on the NASDAQ over the past six straight days indicates that investors are sitting on the sidelines waiting for some direction. The fact that the recent selling has not been accompanied by heavy volume is positive.

With a slew of key economic data out this week, it will be a big week for stocks and could help to determine their near-term direction. The reality is that the market risk remains extremely high.

We continue to see high market risk given the mixed earnings, oil prices, downtrodden housing market, financial concerns, and lackluster GDP guidance for the remainder of the year. After declining to the $111.00 a barrel level on August 19, the light sweet crude for October delivery surged $5.00 a barrel on

Thursday on the NYMEX, and it has rallied back to the $122.00 level. The Relative Strength has strengthened. Continued strength in oil could add more downside risk to stocks in addition to financial and housing concerns.

 We continue to believe the best approach at this time is to use caution and prudence. The bottom line for you should be capital preservation. Be prudent when buying. Access risk capital and trade nothing else. Maintain adequate diversification in regards to market-cap, sector, and geographical exposure. We do not advise overexposure to any one stock, dominant sector, or theme. Going for the home-run winner could burn you and leave you with little capital with which to play.

 This is not a buy and hold market, but continues to be a trader's market for the aggressive player. You should be careful not to chase stocks higher until we see more supportive news. Maintain appropriate stop=loss orders on longs and definitely use stop-buys on shorts.