The markets saw a strong and steady rally Tuesday following a slow start on Monday. Most traders attributed the rally to the housing numbers that then lead to short covering. This is most likely the scenario that played out due to the lack of heavy volume on the buyside. Tuesday most of the major market ETF's started strong and only became stronger as the day progressed. The S&P 500 ETF (SPY  ) started the day with a tiny gap, but consistently pushed higher closing up 1.30%, breaking out of a short term downtrend. The Nasdaq 100 (QQQ  ) can boast a similar start to the week adding 2% on Tuesday alone. Apple (AAPL  ) was a notable performer for the Nasdaq as it was able to break above the highs set on the day after their disappointing earnings announcement.

The Russell 2000 (IWM  ) also participated in Tuesdays rally. In fact, the Russell 2000 was the strongest of all the major indices. The IWM was able to add 2.06% on Tuesday, closing very near its high of the session.

Oil had a strong day but was sent higher after hours due to some inventory numbers that showed a significant decline of excess inventory. The U.S. Oil Fund (USO  ) popped 1.30% Tuesday, and continues on its impressive, but slow rally seen over the past few weeks. There is no doubt that the weekly inventory numbers, due out Wednesday, will be the focus of short term traders. They are already expecting positive news.

The retail sector has seen a modest recovery from the slaughter of bad news last week (XRT  ). Although retail companies still have reported earnings misses, the sector as a whole seems to be getting some support in the short term. Best Buy (BBY  ) reported an earnings miss Tuesday along with shoe retail store DSW (DSW  ). Despite this the sector was able to muster up a rally of just less than 1%.

Lastly we have biotech. The iShares biotechnology ETF (IBB  ) has been sneaking in a little rally lately. Tuesday it was a standout sector with a rally of 2.26%. While it's still down on the month, the rally over the past 2 weeks seems to have caught the attention of short term traders. Volume was slightly above average, and chatter on social sites has increased by over 25%.

Going forward, short term traders will be curious to see if the strong, but light volume rally Tuesday can hold. Going back 3 weeks, each time the markets popped over 1% one day, the very next day it gave it back. Can Tuesday's rally be the first to break the curse?