Dip Buying Brigade

Was Tuesday's afternoon stock fallout from the bitcoin plunge?  I know bitcoin is not part of the mainstream asset classes, but a lot of retail investors have invested in bitcoin, most of them who aren't particularly rich.  If they end up losing a lot of money, that could have a slightly negative effect on the global economy.  But as we look this morning, the overnight crew has already done their job to lift the stock futures to another gap up.  It shows that you cannot overemphasize the price action from one day.  

Yesterday finally showed the two way volatility this market has been lacking, but until we see actual follow through selling the next day, it doesn't mean anything.  Trying to find meaningful bearish clues is difficult.  We did finally see the VIX go up significantly yesterday, even though the downside wasn't that big.  And this morning, even with a decent gap up, the VIX hasn't given up much of its rally so far in the pre market.  

VIX is now trading at a 1 month high, while SPX also trading near a 1 month high. Bond market remains weak, which definitely is a negative, not a positive for stocks.

I haven't added to my short position, and I need to see more clues line up before I add. On the commodities front, Crude oil has had trouble cracking $65 (WTI)/ $70 (Brent).  The speculators are historically long crude oil, so they are definitely loaded up on one side of the boat.  

Other things like the government shutdown is just noise, and news fodder.  Price action has to speak, not news.  And it isn't telling me enough to really make a big bet.