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Tuesday Gains: Bull Trap or Bear Snare?

NEW YORK ( TheStreet) -- If investors are preparing to sell in May, there was little sign of it Tuesday. The major indices were each up by 3 p.m. ET and momentum returned to the beaten tech sector in advance of key earnings reports from Twitter  (TWTR - Get Report) and eBay  (EBAY - Get Report).

But investors on are preparing for a reversal. Sentiment on the ETFs that track the S&P 500 (SPY) and Nasdaq  (QQQ) leaned toward bearishness with more than 50% of commentators predicting declines. Sentiment on the ETF that tracks the Dow  (DIA) was split down the middle midday Tuesday.

$SPY I smell rug pull ??

-- mike (@redart) Apr. 29 at 12:46 PM
That said, some investors believe the FOMC announcement Wednesday and Friday's jobs report will give investors continued reason to put money into the market. Recent comments by Fed chair Janet Yellen, indicating that the Fed would keep benchmark interest rates low well into 2015, have helped fuel gains.

I have a strange feeling Momos will pick up later today - PMs building positions to ride the likely good news from the Fed $IWM $SPY $DIA

-- Yi Zhang (@Virtue_Investments) Apr. 29 at 10:45 AM
Still, most investors said Tuesday that they were playing the markets with plenty of protection to the downside. Some said that buying stocks based on a conviction of everything going higher or lower was no longer the way to invest.

Being high conviction in either direction on the indices has not been a good idea this year. Be nimble, don't be stubborn $SPY $QQQ $DIA

-- Wisedom (@Wisedom) Apr. 29 at 08:19 AM

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.

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