After a straight 15% move down that spiked the VIX to nearly 50 some sort of bounce to relieve the oversold condition was a very high probability outcome. I thought that a bounce would be more powerful than the one we are currently witnessing. The "flash crash" has likely turned off a lot of investors from the market, especially individual investors. This leaves us with a bunch of hedge funds and supercomputers shooting at one another.
Originally I thought that this rally could last until option expiration and possibly the beginning of July. The bearish argument that the market is working off its oversold condition by chopping around is gaining credibility. I am still constructive on the market for the coming week. Seasonality is strong and the market is still oversold. However, I am contemplating moving to a more neutral stance at the end of this week.