By Michael Kahn

Canadian singer Bryan Adams sang in a 1983 release, "It cuts like a knife, but it feels so right." That's what the bears must be feeling this week as the stock market continued its supersized rebound. However, despite heavy losses for those still clinging to bearish views, there is something on the charts that still suggests another shoe is waiting to drop even after Wednesday's decline.

To be sure, a lot of the technical damage created by the September - October drop was repaired including a break of the Standard & Poor's 500's 200-day moving average. And the Nasdaq even managed to climb back above its broken major trendline drawn from the November 2012 low.

What remains troubling is that the S&P 500 did not join the Nasdaq by retaking its own broken November 2012 trendline. And volume, though not the indicator it once was, shows waning participation in the rebound. Moreover, all the sectors that I believe are keys to market health are lagging, including small-capitalization stocks, technology, home building, retail and banks.

Let's start with the S&P 500 (see Chart 1). Since the steadiest part of the bull market began two-years ago, every pullback was very sharp and very quick. Some call them "V" bottoms although that term is really reserved for the end of bear markets, not market dips. However, the meaning is similar as the market's mood turned on a dime from fear to greed.

After last Wednesday's wild ride, when the Dow Jones Industrial Average came most of the way back from a 460-point intraday loss (thanks in large part to St. Louis Fed President James Bullard hinting that the Federal Reserve could pause the reduction of its bond buying program), it started to look once again that the "V" had bottomed.

Here we go again. Or do we?

There is something profoundly different about the rebound this week versus prior rebounds. This time, it occurred below the bull market trendline. When a major trendline such as this is broken to the downside, strict interpretation of the technicals says that the bull is over. Therefore, rebounds now take place in the context of a flat or even falling market, not a bull market.

As mentioned, volume is problematic. Granted, we've seen rallies on low or falling volume last for months since the financial crisis in 2008, but we cannot dismiss it completely. A selloff and trend break followed by a low-volume rebound is the basic definition of an upside correction. It seems a lack of sellers rather than an abundance of buyers is behind the move so it is hard to say that all is well once again.

As for small stocks, both the S&P MidCap 400 and the Russell 2000 remain below their moving averages and several broken supports. And the Russell, after a four-day respite, is back to underperforming its bigger cousin. We would expect that higher risk, more volatile small stocks would lead the market higher if the market truly was back on its feet.

Key sectors are not much different. Even technology, which quickly dismissed IBM's (ticker: IBM) huge drop after it released a disappointing earnings report this week, continues to lag. Good earnings news from heavyweight Apple ( AAPL) propped up capitalization-weighted measures such as the Select Sector SPDR Technology exchange-traded fund ( XLK). But equal-weighted indexes such as the NYSE Arca Tech 100 show the sector's true strength, or lack thereof.

Tuesday, the European Central Bank hinted that it was considering new bond purchases, this time of corporate bonds on the secondary market. It is tricky to navigate the markets when both the Fed and ECB may be back in the quantitative easing business, so we have to give the technicals a bit of rope. After all, every time either of these bodies became active, stock prices ignored all the reasons on the charts that pointed toward lower prices.

But for now, all we have is hints and possibilities. The rally from last week's low does not have enough merits on its own to continue much higher so the bears may be resurrected from the depths of short-covering hell.

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