So far this week the normally slow, summertime trading has woken up and shown some signs of life. This week have seen geopolitical tensions on the rise along with a string of days where companies reported worse than expected earnings. This has caused the markets to wake up along with the volatility indices. The popular VIX ETF (VXX  ) saw brokerage firms raising the margin requirements early this week, seemingly predicting a sudden spike in volatility. So far it seems to have been timed perfectly. In just the last two trading days the VXX is up over 6%.

The S&P 500 (SPY  ) saw a reversal on Tuesday that many technical traders officially called the top. The strong run-up in the morning, followed by the complete reversal of that move sent many to be bearish in the short term. The last time there was a similar move the markets spent the next week pulling back around 1.3%. For the year, of course the SPY is still very much in an uptrend and has plenty of gains to weather a pullback should that happen.

The Dow 30 (DIA  ) has been a big focus this week as well. An impressive string of positive days sent the DIA up over 2%, but just like the SPY, it too saw a strong day reversed on Tuesday which technical traders assumed would be the temporary top. Even though the short term signs seem bearish, the DIA is still higher on the year by 11% so it will take more than a one day reversal to scare the long term investors.

Lastly, the Dollar (UUP  ), which has been lower all year long finally showed some signs of life towards the end of last week into this week. The ETF has come off its lows by over 1% in an effort to break the long term downtrend. The Dollar is still lower by over 8% so the bulls would like to see more buying in the short term to convince others it's time to get long.