The V bottoms or bounces have been hallmark of this market for last 18 to 24 month. They have a distinct characteristic, they start and just keep going and going . This V bounce has faltered after just 2 days.
Besides that many stocks near high continue to breakdown. Hospital sector is recent example.
This change of character is worth taking note of along with the fact oil drop has been followed by stocks drop.
It all depends on your risk tolerance and kind of setup you trade. Some believe in being in market and being invested all the time, some believe in playing markets selectively. There is no one right way.
For the cautious ones , there are enough signs of trouble to be cautious and watch carefully before better action develops.
There are lot of stocks going sideways and forming bases but better market action is needed for the breakouts on them to work.
Market conditions like these can lead to series of breakout failures.
You can reduce size, you can reduce total risk exposure or you can reduce time frame and trade on day trade timeframe under such conditions.
Many traders like me have low tolerance for risk, my objective is to make lots of money with least amount of risk and drawdowns. So in this environment I am more selective in terms of taking trade and getting out at first hint of trouble.