Editor's Note:

The stock market continues to sink but at this point stocks are starting to look a little oversold. I'd rather not chase them lower since the oversold bounce might be sharp. Let's wait for the bounce and then we can pick a bearish candidate that has stalled at overhead resistance.

If you're not comfortable with bearish trades then the best trade right now is probably to do nothing. Actually I'm hearing a handful of market pundits suggest just that - do nothing until early July since June is historically a down month for the market.

If you feel compelled to trade and can't wait then check out my watch list I published yesterday (click here), which includes mostly bearish candidates with a couple of bullish ones.

- James