Is The Pullback Over?: Dow Watch

NEW YORK (TheStreet) -- After today's action, I have to be more confused that anyone. Was Monday's pullback a great buying opportunity, or was Tuesday's rally a small bounce in a bigger decline to come?

The Dow Jones Industrial Average rose 82 points Tuesday, finishing at 9217. That advance helped retrace some of Monday's losses, but it doesn't even account for 50% of yesterday's 186-point drop.

Tuesday's rebound came thanks to a rise in Home Depot (HD Quote) following its earnings release, along with strength in financial companies like American Express (AXP Quote), which benefited from an upgrade from Keefe, Bruyette & Woods.

After looking quickly at Hewlett-Packard's (HPQ Quote) earnings release late Tuesday, I thought the Dow would continue to rebound. H-P beat the Thomson Reuters average estimate by a penny, and sales came in better than expected as well.

After rising nearly 3% during Tuesday's session, H-P shares were down more than 1% in the after-hours session, which doesn't bode well for the Dow Wednesday.

Robert Pavlik, chief market strategist with Banyan Partners, argues that while the long-term outlook is positive, bulls could be in for some near-term pain. Pavlik uses average daily trading volume on the New York Stock Exchange as a leading market indicator.

Unfortunately, volume has been down for the past week and a half, which he said indicates that institutional investors have begun stepping back from stock purchases. "While we view market sell-offs as beneficial, the depth and duration of the Monday's selling pressure is impossible to forecast," Pavlik said in an email.