We're [seeing] some good old-fashioned short-covering in over-sold market conditions. There's a 'take no prisoners' kind of market mentality at play. Investors are playing it close to the vest and the feeling is that more can go wrong than can go right.

But the big picture is that there's no catalyst for the market. This is seasonally the weakest month of the year. The economy is nothing to write home about. The market is building against this tide every day.

The market is not going to be applauding this,

This is more a digestive phase. You have a market that's grasping and hoping to try and put a finger on the bottom.

On the upside, at least the buyers are stepping back in and it isn't just all sellers. We're seeing buying in gold stocks, energy, semiconductors and other oversold names. There's also a lot of economic data coming down the pipe in the next few days and that should give us more to chew over.

We've gone from feast to famine in this market. We began the year on a defensive tone (and moved to) a reversion back to tech and telecom.