Following Wednesday's blockbuster rally, rather than "why," the real question is the "what" -- as in what comes next?

No doubt the

Dow's

second-largest point gain ever and biggest percent move since 1987 will encourage optimists that a tradable bottom (at least) has finally arrived. Bulls looking for contrarian indicators should be encouraged that doubt sprung eternal in the aftermath of the big rally.

James Rohrbach of Investment Models, who adopted a "sell" rating on the

NYSE

on June 6 to accompany a longstanding "sell" rating on the

Nasdaq

(April 26), wrote Wednesday afternoon he's not convinced the big rally marked a bottom. "It is tempting to get in at the first sign of an up move...

but I want to see more positive action," he wrote, recalling the Dow's 325-point rally on July 5 that evaporated in two trading days.

Nothing Unusual

Bears further note that all of the Nasdaq's 10 largest point gains and nine of its 10 biggest percent gains (Wednesday didn't qualify in either category) have occurred since its March 2000 peak. That is, big up days like Wednesday's have inevitably failed to herald the end of the bear market.

Separately, Rick Berry, an independent analyst who's made some

presciently bearish calls this year, described Wednesday as "the most feeble 400 point rally ever," suggesting it was mainly short-covering and speculative buying of the same old momentum favorites. Berry boldly predicted "the market opens up strong

Thursday but closes down on the day."

Early Thursday S&P futures were slightly lower in Globex trading, while European averages were sharply higher. It will be interesting to see what effect -- if any -- the confirmation of an

SEC

investigation into

AOL Time Warner's

(AOL)

accounting has, as well as the firm's soft guidance. (Conversely, biotech giant

Amgen

(AMGN) - Get Report

issued strong second-quarter earnings and

upped sales guidance for the third.)

Support

On the other hand, Woody Dorsey of Market Semiotics, who accurately forecast "capitulation" last April but then

turned bullish too soon (by his own admission), was more upbeat about Wednesday's action. "Stocks have finally given a real reversal," he wrote. "These rare price panics always result in great trading lows and usually result in good interim lows. Typically after a crash environment like this one everyone eventually realized that Mr. Market fooled everybody."

If the market were really going to fool everyone and toy with people's emotions (as it's wont to do) what will happen is that Wednesday's rally will be built upon for a measurable degree of time and price, defying the naysayers. Then, just as folks start getting comfortable again, the bear will re-emerge more ferocious than ever.

But let's see if step one (additional rally) occurs first.

The 'Whys' Have It

Myriad catalysts were cited for Wednesday's advance, including:

J.P. Morgan Chase's

(JPM) - Get Report

reassurances about its liquidity, which rating agency Standard & Poor's echoed. J.P. Morgan rose 16% and other recently battered financials such as

Citigroup

(C) - Get Report

rallied in concert; the Philadelphia Stock Exchange/KBW Bank Index rose 6.5%.

Merck's

(MRK) - Get Report

$10 billion buyback announcement (and increased dividend), which, to some, recalled

IBM's

(IBM) - Get Report

buyback on Oct. 28, 1997 -- at the bottom of that cycle's downturn.

Rumors of a pending buyback announcement (or dividend) by

Microsoft

(MSFT) - Get Report

, which rallied 7.5% to $46.23, snapping a string of miserable losses.

A growing sense that stocks had reached attractive levels relative to Treasuries. Earlier Wednesday, the 2-year note traded with an all-time low yield near 2% while the 10-year note's yield slid to an 8-month low of 4.36%. Treasuries later reversed course as equities rallied.

The arrests of three members of the Rigas family, which once controlled

Adelphia Communications

. To a lesser extent, expectations for congressional passage of a corporate fraud bill further encouraged investors that action is being taken.

Short-covering.

Spikes in fear indicators such as the 1-day Arms Index, which traded over 4.0 intraday before settling at 0.33 and the CBOE Market Volatility Index, which traded as high as 56.74 before closing down 10.3% to 45.29.

On the more anecdotal front, there was Tuesday afternoon's short-selling suggestion by

CNBC's

Maria Bartiromo as well as

The Wall Street Journal's

recent story about increased short-selling by individuals. Short-selling data and mutual fund outflows suggest extreme bearishness among retail investors, historically not the best market timers.

In addition, there was some towel-throwing by some previously staunch bulls, which had been previously missing. Tobias Levkovich, U.S. equity strategist at Salomon Smith Barney, issued a report Wednesday morning titled: "A Wounded Bull Pulls In His Horns."

Levkovich, who'd turned bullish in February and was

sticking to his guns in late June, cut year-end targets on the Dow to 9650 from 11,200 and on the S&P to 1000 from 1200-1250. "The key problem is not having a clear benchmark for valuation purposes," he wrote, referring to investors' disbelief in corporations' reported earnings and his own belief in the shortcomings of S&P's so-called core earnings. (Basically, that there's no track record of core earnings to compare the current results to.)

Separately, Don Hays of Hays Advisory Group admitted (finally) his "

new bull market" thesis had burst after all major averages careened through their Sept. 21 lows. An "embarrassed and humble

d" Hays was "reluctantly selling some stocks," despite "super-strong evidence that a major bottom will be made in the next few days." (Uh-oh.)

Weird Al & the Gang

Of course, none of the aforementioned reasons will convince some readers the gains weren't the result of market manipulation by the

Fed

or other government agencies.

As I suspected,

Tuesday night's story did little to disabuse some readers from the notion the market has become a government-sponsored entity. If the Fed isn't

directly

buying equity futures, they could "encourage" member banks or big broker/dealers to do it on their behalf, many suggested. Then there's the President's Working Group on Financial Markets, better known as the "Plunge Protection Team."

It's unclear whether any government operatives were active in the financial markets. But conspiracy theories aren't really necessary to explain the action. Stocks have been battered and, as reported here

ad nauseam

, there's been a never-ending string of folks trying to call a bottom. That is, hordes of participants are anxious to put money to work on a belief the selling was irrational and didn't reflect the perceived strong fundamentals of economic recovery and low inflation/interest rates.