NEW YORK (TheStreet) -- A very impressive two-day rally off the lows for the indexes continued on Wednesday, fueled by the Federal Open Market Committee minutes that said nothing new.
The DJIA (^DJI) closed up 181 points at 16437.24 and the S&P 500 (^GSPC) closed up 20.22 points to finish at 1872.18. The Nasdaq (^IXIC) closed up a whopping 70.91 points at 4183.90 and the Russell 2000 (^RUT) was up a generous 15.73 at 1159.96. This was all on top of a huge gain on Tuesday.
So after three down days in the indexes, we have had two huge up days. As I have mentioned on more than one occasion, this market will be volatile in 2014. You need to have a risk management process as a trader and investor to succeed.
And I will once again mention the volume. This has been a very big issue for me. Has anyone noticed that the volume, or lack thereof, was anemic on Tuesday and Wednesday, two huge up days? The volume is far less on green days than on red, down days.
It matters, folks.
The Nasdaq, which I mentioned as being trend bearish on Monday, is still trend bearish after this two-day up move. Yes, "trend" is a three-month or longer time frame for my algorithms. I will always change my stance when I am given the signal.
I have not seen a trend bullish signal. When I do, I will mention it in this column.
The Russell 2000 is still trend bearish also, but is closer to becoming trend bullish than the Nasdaq. The DJIA and the S&P 500 meanwhile never entered into trend bearish mode. Thus, we have a two-tiered market that will, at some point, be worked out.
We should know within the next day or two if this is indeed a relief rally within a larger bearish trend, or the real deal of a correction within a bullish trend. As of right now, we are getting mixed signals from the Nasdaq and Russell 2000 on one side and the DJIA and S&P 500 on the other.
Thursday's trading session should prove to be quite interesting. A couple of stocks that had huge up days were Apple (AAPL) and Facebook (FB). Both were coming off of oversold signals according to my algorithms. Let's see if they both can build off of that or if this was another relief rally because they are oversold.
I did close my LG Display (LPL) short that I mentioned on Monday. I covered that position this morning when it was red for a nice gain. At the present time, I am in cash.
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.