What can we say about yesterday's ugly price action? While it seems to Macro Man that the VW episode is very, very unlikely to be the cause of a secular downturn in equities (while important, they are hardly systemic) they have certainly provided the extra bit of oomph that the market needed to emphatically confirm the break of the SPX wedge to the downside.
As astute observers have pointed out, yesterday's weakness came amidst a relatively muted move in the VIX; if punters, pensions, and PMs were really scrambling to replace downside hedges that expired last week, one might reasonably expect that implied volatility would have done more than shrug its shoulders and given a half-hearted "whatever."
So on the one hand, we have a market that's technically and seasonally set up for further weakness ahead, and on the other hand one in which putative option buyers are either already long or simply can't be bothered. For choice, Macro Man will go with the chart and suggest further weakness ahead, though his predilection is generally to fade price action based on idiosyncratic, non-systemic issues like VW. It's just as well he's in a position to patient. Another 100 points or so in the SPX and it will finally be a dip that he feels like buying.