While I began to shift more from the short side to the long side on Tuesday and will now buy on weakness rather than sell and/short into strength, I'm not willing to call this a raging bull just yet -- not even close. This market is going to have to prove itself at least once or twice more. The market has posted 2 straight days of higher volume than the day before, which technically indicates institutions are beginning to put some money to work, but clearly they aren't jumping in with both feet just yet. There is some caution there. Let's not forget that short covering no doubt played a role in the recent rally.
The bottom line is that though the market has shifted to a more bullish tone in the past 2 days, volume remains a bit tepid. While the recent breaks above resistance in the both the Dow and Nasdaq indicate that long positions have become more favorable, I wouldn't be chasing positions up at these levels. The market has come a bit too far too fast and we need some healthy consolidation from here. I'd like to see the gains of the past couple days wiped away with decreasing volume. That would provide further evidence of a strengthening bull and a great opportunity to put more money to work on the long side.