Surprising Strength and VDX Updates...10.03.15

We had another V bottom day Friday with a heavy hit to the financials in particular.  The markets however were not long deterred by a lousy jobs report, perhaps in anticipation that poor economic profiles lower the odds for a FED rate raise.  Virtually no one now believes the FED will raise in 2015 and as previously mentioned there's now a local minority saying the odds for 2016 aren't much higher.  The past few days have had some tremendous whipsaws and have dramatically illustrated the value of trailing stops for daytraders.
I read a few reports this week by analysts who have a good track record and the emerging view is that China 's woes are bottoming and this may be a good time to at least get a small position going although we should expect some volatility along the way. FXI's hot action on Friday suggests more than a few folks are buying into the buy China argument and the VDX update below indicates that FXI is now almost overbought.  What a difference a weeek makes.
Longer term (4 weeks) the US markets are kicking off earnings season next week and after last quarter's sub-par reports the anticipation and fear factor are sure to keep volatility trending up for the next month or more.