By Teeka Tiwari, ETFWarrior.com

European fears along with Friday's looming sequestration deadline are playing havoc with Wall Street's nerves. But the truth is we've been warning for several weeks that the market has been overbought and was due for a pullback. And here it is.

Fear of an ugly three-way tie in Italy's elections is the newest reason that the market has latched onto to sell stocks. So far this looks like a pullback into an ongoing up trend. But I wouldn't be shocked if the S&P 500 ($INX) fell to as low as 1,460 before reversing back higher.

Conservative investors can take a step back and wait for their favorite names to get a little cheaper before buying. The aggressive traders who don't mind going temporarily short during a pullback can take a look at the following three ETFs.

Market Vector Oil Services (OIH)

Oil service stocks have already started to come off their highs and they look like they want to go lower. OIH will give you great exposure to the sector, and this ETF is very liquid.

Use a rally to $43 to get short with a $46 stop and a downside price target of $38.

Vanguard REIT Index (VNQ)

The real estate sector doesn't look terrible, but it is very overbought and the sector looks primed for a deeper drop. If you see this pop up to $69, you can short it with a $72 stop and a downside price target of $65.

Financial Select Sector SPDR (XLF)

The finance sector is scraping up against high overbought readings, and if the broad market is going to take a pause then so will this sector. You can short this one right here (around $17.25) with an $18 stop and a downside price target of $15.50 to $16.

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