Stocks have gone from one extreme to another.

Back on Christmas Eve, just three stocks of the Nasdaq 100 were trading above their 50-day moving average. Now, 93 are above the short-term trend line, illustrating a massive bounce off lows. That's the biggest swing ever, according to NorthmanTrader's Sven Henrich.

"Some of the sharpest rallies come in bear markets," Blue Line Futures's Bill Baruch said on CNBC's "Trading Nation" on Wednesday. "Where we are right now, we are hitting a bit of an inflection point."

The Nasdaq 100 broke above its 50-day moving average in mid-January, consolidated through last week, and is now breaking out again, says Baruch.

"On top of that, you're aligned with the 200-day moving average, 7,050 to 7,060. There's a tremendous amount of resistance up there. It tells me that this range, this rally has been extended and it's time for it to come in," said Baruch.

The Nasdaq 100, an index that includes Apple and Amazon, is trading just below its 200-day moving average. It has not traded firmly above that long-term trend line since October. However, it has rallied 19 percent off its December lows.

"What would convince me that this is not just a bear market rally would be a pullback of roughly 5 percent, something healthy where this market can come back a little bit and people don't panic and then it can go back higher," Baruch said. "I want to see that play out and then I think we can continue higher in a path similar to last year."

Fundamentally, a global economic decline has to slow and then stabilize before BK Asset Management's Boris Schlossberg gets bullish on the markets again.

"You're seeing some pretty serious material slowdowns," Schlossberg told "Trading Nation" on Wednesday. "The really one big economic thing I'm going to be looking at in Q2 is global PMI [Purchasing Managers' Index]. If global PMI starts to stabilize, if all those factors start to finally show sequential growth, then yes, you have a legitimate case for further upside. Otherwise it's very much a bear market rally and will peter out."

Global economic growth slowed close to its lowest level in 2½ years in January, according to the JPMorgan Global Composite PMI. Both growth in manufacturing and services activity decelerated.

"They need to see at very minimum a stabilization in order for us to have some confidence that this rally is going to be real," Schlossberg added.