Markets are well oversold in the ST now to see a snapback. There's an unfilled gap just below at about 1775 on the NASDAQ that could get filled first though so beware. If markets bounce before filling that gap I'd be skeptical of it lasting for more than a 1 day.
One postive thing I've noticed is that the VIX is still jumpy anytime the market drops. That indicates that traders are not getting complacent. At previous times the market rolled over from an IT top that led to severe downside, the VIX would not go up much on weakness but would drop rather easily on stength.
In these situations whereby the market is ST oversold but red-lining IT wise, its best to be very, very selective about playing any bounces because what often happens is that any ST oversold condition doesn't provide much traction for a bounce....it simply gets more oversold or after a brief bounce gets oversold again as new lows ensue. Therefore when in doubt, stay out and wait for the premium play. Going short at this point is too late unless obvioulsy you have a longer term horizon and believe the market will re-test its lows in the comming months.
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