NEW YORK ( TheStreet) -- Tuesday's economic data backed the Federal Reserve's announcement last week that it may slow bond purchases if the economy strengthens as durable goods orders and existing home sales outperformed expectations. Alongside support from the People's Bank of China, global markets rebounded and riskier assets found buyers.The first chart below is of SPDR S&P MidCap 400 ( MDY) over iShares S&P Index ( OEF), which measures strength of mid-cap stocks relative to large caps in the S&P 500. As smaller-cap stocks outperform larger ones, represented by upward price movement in the chart below, investor sentiment tends to be strong. Since mid-May, this pair has trended lower, signaling that investors were favoring large-cap stocks and positioning portfolios defensively. The Fed's announcement last week brought this pair down to yearly lows. As markets have stabilized, realizing that dire predictions of market weakness may be overstated, the price action has rebounded higher.