Following the poor earnings report from Google's corporate parent Alphabet Inc. (GOOG) , the indices were under pressure in the early going.
This triggered a very large buy program at 11:08 a.m. ET. That washed out the sellers and helped to progress a very aggressive V-shaped bounce.
One of the most impressive things about the market in recent weeks has been the strong underlying support.
The bears have had a few opportunities to gain some momentum, but the dip buyers refuse to relent. There was a good opportunity to press and take out some stops, but the bounce back was fast and furious.
Despite the fact that the Dow Jones Industrial Average is almost back to flat, breadth is still soft with about 3 losers to 4 winners.
In addition, the market is also looking ahead to the Federal Reserve's interest-rate announcement Wednesday afternoon.
After the "hot" GDP number last Friday, market players will be looking to see if Fed Chair Jerome Powell may not be quite as dovish as he was previously.
Many economic savvy folks think the GDP number was rather deceptive, but we'll see what the Fed has to say about it Wednesday.
As I discussed, I took the opportunity Tuesday morning to cut quite a bit of inventory.
Some things have bounced back, but I find sometimes that it is better to act so that inertia doesn't start to set in.
Maybe the market will shrug off whatever it is that was bothering it Tuesday morning, and I'll have to work hard to add back some long exposure, but I like having the flexibility of increased cash, even if I do have to chase a few things.
I see quite a bit of poor action in small-caps names right now, and I'm going to keep stops tight and be very selective with buys.
I'm not calling for a market turn, but this market needs to act better if it wants more of my money.