It looks like we are in the process of the initial bounce, but it's a bounce which typically forces 'weak hand' buyers to panic themselves into positions; these buyers will quickly sell when markets start to retest Monday's lows. But, it's a start.
We—and America in particular—are a long way from the end of the COVID rampage. When death and infection rates pick up we are going to see markets weaken and then we will be looking at lows, or maybe new lows. On the plus side, trading volume was higher in accumulation.
The S&P improvements are working against a relative performance drop against the Russell 2000. Technicals remain weak and show no divergences.
The NASDAQ closed slightly lower yesterday, finishing at the top of its recent congestion range. Selling volume was well down on Tuesday's buying (but this volume was well down on last week's). Technicals remain weak.
NASDAQ Bullish Percents have moved sharply higher in one of the strongest reversals in breadth metrics. When markets do move into a retest of swing lows, we will want to see breadth metrics, like the bullish percents, hold on.
The Russell 2000 (below via iShares Russell 2000 ETF (NYSE:IWM)) closed a little higher as its performance is caught in the middle between the S&P and NASDAQ. Buying volume yesterday was well down on Tuesday's—the index still has much work to do.
For today, we want to see indices push beyond the recent consolidations and set up challenges for 20-day MAs and maybe 50-day MAs. This is a bounce which will establish a swing low, but it could be months before we see a meaningful rally from indices.