Recap

A big bounce in AAPL and continued strength in a few Dow stocks led the market higher. There was a brief dip in the final hour, but the buyers regrouped and managed to close pretty well.

In addition to Apple, there were also quite a few bounces in smaller stocks that were crushed last week. In many cases it was on lighter volume, but the dip-buyers, who had disappeared last week, did step up. It is pretty much what you'd expect in a market where a number of stocks had become oversold, but the much more important question is whether or not we keep on going.

Although breadth was almost 2 to 1 positive, volume was quite light, which tends to make a bounce less trustworthy, but since March 2009, shorting low-volume bounces has been a disaster for any bear brave enough to do it much. Technically, bounces like we saw today shouldn't be trusted too much, but as a practical matter that has been a bad call far too frequently for far too long to do so with a high level of confidence.

We'll see if the bulls can pull it off, but they are going to need some strong reactions to earnings reports to really heat up the momentum again. GE, WMT, and IBM can lead for only so long on their own. They need to drag along some other stocks with them to if we are going to have a healthy market. It is a very rare thing for these big-caps to lead like this, so either the rest of the market perks up or big-caps falter, or it is going to be a very odd mix.

Nothing is moving very much on earnings after the close, but we have a slew of reports tomorrow, including a number of Dow names, which should keep things interesting. The bulls are trying to pull off yet another quick recovery. They have their work cut out for them, but they had a decent start today.