The markets started the week off with a bang as the S&P 500 jumped higher 1.5%. However, it is important to understand that the markets are still in correction. In order to resume the up-trend, as I tweeted earlier, the indexes need to see a pop of 2% or more on increased volume. We met neither of those conditions today.

Even without the volume, the price action is a positive sign as many leaders retook their 50 day moving averages and even broke out of bases. The indexes, on the other hand, closed below their 50MA and will have to push above that level of resistance to shake the pullback.

Warren Buffett commented today that the Japanese Tsunami left investors with a buying opportunity, which would suggest that he sees the latest drop in prices as just a pullback and not a top. He might be on to something there.

One thing I am finding interesting is the volume spike in short ETFs. Of course, it could be due to an increasing popularity of the securities and isn’t consistent through all the short ETFs, but it is curious nonetheless. QID and MZZ are two examples I saw: