The U.S. markets bounced back after yesterday's sell-off following the Chinese example. Indexes were mildly up across the board. Fourth quarter GDP was revised down from 3.5% to 2.2%. January new home sales also fell 143,000, or about 15%. I had the feeling that investors paid little attention to the economic data and were more just glued to their screens watching the market action.

The NYSE had volume of 3.8 billion shares with 2,111 issues advancing while 1,204 declined for a loss of 45.13 to 9,124.54. On the NASDAQ, 2.6 billion shares were traded, 1,667 stocks advanced and 1,398 declined for a gain of 8.27 to 2,416.13.

Stocks on the move included Watson Pharmaceuticals Inc (NYSE:WPI), down $1.71 (-6%) to $26.36 on earnings. Chicago Mercantile Exchange Holdings Inc. (NYSE:CME) is up $28.16 to (5%) to $539.15.

Options volume was still very heavy, but lighter than yesterday. Six million puts and 5.6 million calls traded for a put call ratio of 1.08. This put/call ratio is higher than normal as investors continued to pick up some extra insurance after yesterday's down action. We have seen lots of option activity on Domtar Inc. (NYSE:DTC) over the last few days and now Weyerhaeuser Co. (NYSE:WY) is also up in the top 10 with the March 95 calls (WYCS) trading over 51,000 contracts and the March 95 puts (WYOS) trading over 49,000 contracts. This activity is the result of the coming merger between the two companies. The CBOE Volatility Index -- the market's fear meter -- jumped from 11.15 to 15.42. after yesterday's sell-off.

The Kevin Kersten is an analyst with InvestorsObserver. DISCLOSURE NOTE: Mr. Kersten owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.