As the indices continue to inch higher, complaints about being underinvested continue to grow louder. If you take a trend-following approach, you shouldn't be heavily long since the market is still in a downtrend. Nonetheless, it is still frustrating not to be more aggressively long with these sorts of bounces.
It is always interesting how the psychology tends to shift when there's a bounce like this. Even those who were convinced that the downtrend was going to gain momentum now have doubts, although there is nothing to indicate that this is a major turning point. It is exactly the sort of countertrend action one expects, but it still plants doubt in the minds of bears who were certain just a few days ago.
I'm respectful of the potential for another V-shaped bounce, but I'm not rushing to put a lot of cash to work. That is primarily a function of not finding anything new that I want to add, but also a product of not having a bullish bias.
Regardless of today's action, the sentiment created by earnings will determine the direction of the market. IBM (IBM) and Intel (INTC) report tonight and they will be very good tests of the market mood. I'll keep looking for buys but I'm not expecting to find much new. Michael Kors (KORS) continues to look good, and I'll keep it on my screen for possible additions.