I am urging traders to be cautious. Today's bounce was nothing more than a relief rally over vague promises and sounds bites out of the EU summit to help Greece with its debt burden. That doesn't mean stocks can't keep rising. The market was oversold. There is still room to bounce. However, we might be better served looking at this bounce as a potential set up to open new bearish plays instead of buying it as a bullish opportunity.
I suggest you place a Fibonacci retracement tool on all the major averages and look at the market correction over the last few weeks. We're not even back to the 38.2% Fib retracement level, which could easily be overhead resistance. If you do look you'll see that the Russell 2000 index, the TRAN transportation index, the SOX semiconductor index, the NASDAQ composite, and the S&P 500 all nearing their 38.2% retracement levels.
Let's see what happens tomorrow. Does the rebound see any follow through? How does the market close heading into a long weekend (U.S. markets are closed on Monday)?