After observing the heavy volume last Thursday I was expecting the market to continue to rally for a few days. That rally has materialized and continues to move higher. I have been pointing out the diminishing volume on the rally and saying that it was a reason for concern, but not a reason to sell any longs or to get short. The short term trend has been higher and today the SPY recaptured the 200 day moving average after being stuck under it for eight straight trading days. That is important for the psychology of the bulls. Now that the markets have moved back above levels that many people were expecting to be resistance, it is possible that the shorts will experience some more of the recent pain that bulls have felt. I still think the market is vulnerable to further shocks but price is healing nicely and price is all that pays.