Good Friday all. It's been a dismal week for the markets but maybe, just maybe, we're starting to see signs of life. Rather than continuing to try and catch a falling knife though, we patiently await a reversal signal from the major indexes to suggest the markets have decided to stop bleeding, at least for a while. As I type, all of the major indexes have erased their early losses this morning, so it will be interesting to see if we can get the necessary follow through that stocks have been desperately seeking for weeks now. Our suggested oil trade appears to be doing just fine with the price of light sweet crude up a couple of bucks from our suggested entry yesterday. However, one day does not make for a successful trade, not in our book anyway. One of our readers picked up on the fact that the VIX hasn't been acting normally of late, which was a very interesting observation on his part. The VIX is the markets' best gauge of volatility, and probably the best indicator of fear. You can go back as far as you'd like and you'll notice when the markets sell off as hard as they've sold off over the last while, the VIX jumps like clockwork. That hasn't been the case over the last couple of months. I've included a weekly chart of the VIX here for your review. Go back to the summer selloff and you can see exactly what we're referring to. Basically, the markets are saying they're not scared right now. Quite a different picture than what CNBC continues to paint day after day regarding the fiscal cliff and the potential for a complete and total meltdown. Keeping it in the best interest of objectivity though, we still need to see some sort of reversal signal, since most of the short-term logical retracement levels have been breached. One big mistake many investors often tend to make is thinking the markets can't go up or down any more without some sort of relief or pullback. Well, I've been around long enough to know stocks can go up or down just enough to drive anyone crazy. It's important not to employ a strategy of "enough is enough" without having some sort of reasonable context for the trade. Thinking that a stock is simply due for a bounce is never good enough. You've got to have some sort of reliable context that history has proven in order to suggest it's the right time to play contrarian. With that being said, we're looking for a nice snapback along with couple of days of follow through before we're going to be convinced an actual tradable bottom is in place. However, even if we get a snapback and one or two days of green on the screen, it doesn't necessarily mean the worst is over. For example, since it's the last day of the week, we may have a lot of traders covering up short positions since it's very common for short-term players to cover up going into the weekend. A big day Monday, however, would be a very bullish sign. What we're really looking for is an increase in volatility with a nice big jump in the VIX, or an extremely fierce move to the upside suggesting a change in the short-term trend. The fact that the VIX isn't suggesting any real fear out there actually has me a bit concerned right now. If we can get one big wash out in the markets, it would go a long way for the bullish argument. I'm not a huge Stochastics fan, however, Stochastic levels are at their lowest point in years. We've got a lot of weird market activity when it comes to technicals right now, so let's not be so quick to run out and play bullish predictor just yet. Let the markets prove to us that they're ready to build a base. We're going to continue to keep a close eye on what's taking place in the event we start seeing some semblance of a bottom. It just hasn't developed yet, but once we see something worth pointing out, you'll be among the first to know.