Volatility has returned in full to the markets, which is usually welcomed by swing and scalp traders looking for robust price action in stocks.

But the volatility that’s returned has also left some traders scratching their heads, wondering what the next play will be. Between the uncertainty in Europe and the downfall of China, traders must stay on their toes in order to profit as they face off against buy programs and other obstacles in the market.

Europe’s debt crisis has been the focal point for investors over the past few weeks but today, a report issued by the Justice Department noted that U.S. regulators are looking into accounting issues at Chinese companies that are listed on U.S. exchanges. As a result, nearly every Chinese company (including ADRs) listed on NYSE or Nasdaq got slammed as traders and institutions sold off en masse, trying to avoid being caught in the mix.

“Names like SINA and SOHU are down because at the top of the awful floats,” Evan McDaniel, an independent futures and options trader, told Markets Media.”SINA, SOHU and BIDU were all levitating as the big names like AA, X, BAC and GS were all being sold. I have been a fan of YANG China bear ETF since the mid 13’s.”

On top of the China debacle, equities this week have been shooting up a few percentage points at the opening bell, futures included, only to fade into negative territory throughout the day and into the close. Thursday’s positive close was attributed to institutional buy programs and algorithms that kicked in late in the afternoon.

“Overnight currency and commodity wars between central banks and countries are the new ‘cold war’,” said McDaniel. “Someone is picking their spots to get short and hammer the market. They are testing the resilience. As Paul Tudor Jones would say: they are ‘tom tomming’ the market.”