The most bullish thing that occurred during Tuesday's rally was anecdotal.
No one bothered to ask if this was it 'It' -- you know, all those questions like "is the low in?"
You might recall last week that was all anyone cared about. I suppose some investors and traders are like Mark Twain's cat who sat on the hot stove and would not sit on any stove again.
Or perhaps they didn't ask, because Tuesday's rally was so different than last Thursday's rally in terms of participation. Last Thursday, the breadth on the New York Stock Exchange was the best we'd seen since early January at plus 1,950.
Tuesday breadth was plus 1,300. Oh, sure, last week the S&P 500 tacked on 12 more points than it did on Tuesday, but that's not enough to account for the breadth lacking.
Last Thursday, there were more new highs on both the NYSE and Nasdaq than there was on Tuesday, despite the S&P tagging the same level. Last week the NYSE saw 168 new highs and Tuesday there were 156 new highs. Nasdaq, which also tagged the same area from last week, had 93 new highs last week and only 72 this week.
And once again Nasdaq had more stocks making new lows than new highs.
Then there are the banks, which rallied better last week. So did the Transports. And the small caps. Last week the McClellan Summation Index, which is still heading down, needed a net differential of +900 advancers minus decliners to halt the decline; Tuesday it needed plus 1,200.
But you know what? Having just reached an oversold condition, we're not yet overbought. There is a chance that the 10-day moving average of stocks making new lows could peak later this week or early next week. That would be a change.
Then there is the 10-day moving average of the put/call ratio. You might need a high-powered magnifying glass to see, but it ticked down after Tuesday's trading. The put/call ratio started the day rather low (under 80%), but ended the day at 93%, so it was low enough to take the moving average down but not low enough to make me think complacency crept back in so quickly.
Sticking with the sentiment side of things, the Investors Intelligence bulls and bears barely budged from last week. I was hoping that we'd see the bulls back off some more and the bears surge a bit, but that hasn't happened. The bulls are 48% and the bears are 18%.
In sum, the market's action did not do much to change my view. An oversold rally and back down is still my preferred scenario.