Tuesday was pretty unimpressive to me as there was no news to indicate the causes of this correction have been obviated. No favorable inflation news occurred - in fact the high Q4 unit labor cost number was nominally worrisome although it's probably overstated by year end bonuses. The productivity number was low, imho. So Fed rate cuts are off the table without a big downturn, which would be bad for stocks. And further bad news on inflation might even bring the Fed back into play. This is a risky point in market "phase space". "Phase space" in classical physics is a multidimensional space comprised of position & momentum. For the market, it's the concept of the markets level and its trend. The level of the market is not at any logical stopping point for the correction [see recent post] and the trend seems down. News can change this but we have none. Monday could just be a "4" wave of a 5 wave down move [cf. Elliott Wave concepts] which would be appropriate for a major correction. Shorting this bounce for a short term trade is very tempting.
Still, the higher close means this is an IBD "Day 1" - see http://www.investors.com/ & subscribe. I'll probably do nothing & wait for news and a new intermediate term trend to develop. On more bad news I'll try a short in futures if I am nimble and at my "turret" if it hits.
PS: changed my mind & started a S&P short futures a little before 6 AM EST. The 5 minute chart looked tempting. I won't take much of a loss as this is a quick hitter.
PPS: oh well. I covered that for a small loss when the futures held green a few minutes after 10:30 AM EST. I've used that sign as a "tell" for awhile & am following the sign.