"I think the impetus is still on the bulls. I think the shorts got squeezed," Adami said, adding that stocks may close lower on Wednesday.
The S&P is caught in a range between 1,105 and 1,230, trader Joe Terranova said. In the last two days, there has been an unwinding of a short trade. For some time, investors had feared Armageddon by way of the European debt crisis because it didn't seem as though European leaders were working collectively to solve the problem. Things have changed over the last few days, though, with policymakers appearing to work together. So Terranova said the market sentiment is equaling out, where it's not too bullish or bearish.
"The way you play this market overall right now is you have to look at yesterday's lows and use those at point of reference," Terranova said. "I think that's the most critical technical aspect of the price action in the last few days."
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CNBC.com with wires.