Jeff, many of us are asking the same question. I suspect it’s #3, some buying by central banks (that is, a bump higher in the buying they’re already doing as policy) and “buy the dip,” which is now a deeply engrained behavior that will take repeated losses to modify.
If we look at indicator such as NYMO (McClellan Oscillator), CPC (put-call ratio), etc., these sank to extremes, suggesting a relief rally is on tap, Technically, declines tend to stairstep down: a big drop, then a relief rally that rolls over into another decline,and so on. Given the rewards that have been showered on those who bought every dip for 9 years, that behavior will cause dips to be bought for quite some time.
We can also expect TPTB to push markets to new nominal highs, just to scorch Bears and “prove” (since the stock market is now a signaling device) that everything is back on track.
Lastly, it’s options expiration next Friday, and market-makers hate to hand Bears big profits for being short/holding puts. Typically, markets rally into Wed. of OEX week and it usually doesn’t pay to bet against that.