The technology sector has been particularly hit during the pullback after tech giants released quarterly earnings results that topped analyst estimates but fell short of revenue targets.

“Asset carnage is cross-market and has infected U.S. tech leadership,” Hartnett said, adding that the asset class is oversold.

The strategist has warned of potential bearish signals, highlighting rising interest rates, slower economic growth and excessive debt as negative indicators.

To help keep one’s cool in any market condition, ETF investors should have a methodical strategy in place. For instance, at ETF Trends, we try to stick to three rules that should help keep most investors out of trouble: First, investors should maintain an 8% stop-loss on ETF positions. Second, people should keep an eye on the trend – if the ETF starts to test its 200-day average, then it is time to consider action on the trade. Lastly, don’t chase after hot areas of the market.

The first and perhaps most important screening process for ETFs is knowing the 200-day moving average of each candidate and where it stands in relation to it. We look for uptrends, and then examine those trends using fundamental analysis. Once a position is entered, we stay in the investment until the trend turns sour or declines below its trend line.

For more information on the trend following strategy, visit our trend following category.