The "buy the dip" crowd seemed to run out of steam yesterday and I believe the majority of traders are leaning long. Rydex traders are sitting on near record longs. We saw a big drop in the VIX yesterday despite the lower market, leading me to believe that a big long vol trade blew up yesterday or somebody put on a big short vol trade. Either way it does not seem that the crowd is positioned well for a decline.
We are in a seasonally strong time that tends to see heavy inflows into the market so its possible that inflows save the day. That is the only positive I see right now and not enough to make me want to take on a large amount of market exposure. I would use a correction in the next few days, if it occurs, to take me back to medium exposure levels.