The market failed to hold the opening lows and that has produced sharp technical selling. There isn't any specific news causing the rush for the exits but once the 1225 level of the S&P 500 was broken, that triggered stops and caused more aggressive bears to start pressing. The good news is that we have not yet breached the 50-day simple moving average at 1205, but should that come into play, there is going to be a very high level of nervousness.
I still believe there's a big supply of potential dip buyers looking for entry, but they tend to lose their nerve and stand aside when we have intense technical selling. They will look to get back in only after we stabilize and start to turn back up. They don't tend to buy into the teeth of a decline. Once we find support and hold, I believe we will see an energetic snapback, but we have to stay about that 50-day simple average at 1205 or so.
I'm a buyer, but I still have a very high level of cash and I'm moving very slowly. There are quite a few stocks on my shopping list, but I prefer to buy them when they are going up rather than breaking down.