After last week's pullback, the buy the dippers got busy.

Once the S&P held its 20 day moving average (now support), confidence surged as buyers moved back into internet, real-estate, consumer services, retail, regional banking, and technology. Merger talk surrounding Hewlett-Packard (HPQ) and Electronic Data Systems (EDS) seemed to make people giddy for excitement along with a bear trap reversals in MBIA (MBI) & Fedex (FDX).

If you're shorting this market with everything you've got, patience has to be running quite thin especially into what most expect will be more better than expected inflation data (wink, wink) and another options expiration Friday. Hoping for government data to spark a selloff hasn't been a money trade for some time now. Will this week be any different?

The one thing you can count on is more volatility as we get closer to Friday. And, I make that statement with full knowledge that the VIX is sitting at this year's low. The good news is that we have a well-defined trading range to work with using the recent highs and lows from the past week.