Bulls Go on the Offensive

Tuesday's bounce makes a lot of sense from a technical perspective. But proof of whether it's a "dead cat bounce" or the start of a true rebound won't come until Wednesday, when more fundamental evidence is in hand.

"I think we rally right into the beige book, and then we'll see what this [bounce] is really made of," says Alex Grace, a trader and hedge fund consultant.

There's no question that Tuesday's rally was much stronger than any of the tepid advances since last Tuesday's plunge. After stabilizing trading sessions in Asia and Europe, the Dow Jones Industrial Average surged 1.3% to close at 12,207.59. The S&P 500 jumped 1.6% to close at 1395.41, its largest day gain in four months, and the Nasdaq Composite finished up 1.9% to close at 2385.14 -- its best day since October. ...