Was it just a handful of days ago that everyone finally realized the small caps had been so weak? And now I see praise being put on it. I won't argue with the praise, because it is deserved at this point.
After all we have had three-straight days of breadth on the New York Stock Exchange in quadruple digits, which hasn't happened since last spring. Is it short covering? Probably. But to quote Bob Prechter: All rallies begin with shorts covering. The question is if you can then get real buying to take the lead.
But back to breadth. It has been so good that the McClellan Summation Index finally stopped going down. It had an attempt to stop going down and turn up in mid-August, but it didn't amount to much. It now requires a net differential of negative 600 advancers minus decliners to turn it back down. I will chalk this one up on the positive side of the ledger. You probably need a magnifying glass to see it and even with that, it might be difficult to spot.

But notice that the Overbought/Oversold Oscillator is not even over the zero-line yet. Not the New York Stock Exchange, nor Nasdaq. My notes say -- and this is subject to change based on what the market does in the ensuing days -- we are likely to get back to an overbought reading sometime around Labor Day. That means I do expect to see the oscillators rise up and over those zero-lines sometime in the next week or so.

So what are my complaints? Oh, do not fear, I have a list of complaints. I'll begin with the fact that the put/call ratio has sunk to .69, which is the lowest reading since late July. I would prefer it if folks fought the rally, but they are quickly embracing it.
Then there is the Daily Sentiment Index (DSI), which held steady for Nasdaq at 90, but the S&P crept up to 86. For this reason alone it would be great if the market backed off for a day or so to shake it out and reset these indicators.
There are also trendlines. The Invesco QQQ (QQQ) has a very short-term one that comes in right around here.

I don't view the QQQ trend line nearly as strong resistance as I do the longer term one on the chart of the S&P.

If that wasn't enough, we have a downtrend line for the Russell 2000 exchange-traded fund (IWM) we're about to come up against.

A back-off would help those down-and-out charts (call them reopening stocks, economically sensitive stocks, whatever you want) to improve. A back off would shake out this very short term positive sentiment that has built up in the last two days as well. And maybe a backing-off would explain why the Volatility Index was green all day on Tuesday. But I do think if we back off, we would once again try the upside, because we're not yet overbought.