It never ceases to amaze me how investors turn positive after the market has already rallied. Investors had the opportunity to buy the S&P 500 over 30 points lower on Friday but instead were fretting over moving averages. Two trading days later and with the market more expensive they were clamoring for calls yesterday.
The Nasdaq was down something like six days in a row before Monday so an oversold bounce was not unexpected. However, now that we have bounced and investors have once again turned optimistic the risk/reward is more muddled. The market has only rallied for two days so its too soon to turn bearish with any conviction.
I believe the most likely outcome for the next few weeks will be some sort of a trading range. I would not chase the market either lower or higher.