Volatility crush indicates bulls on thin ice...but they still have control

We saw the market go in the red only for the briefest of moments today and then when it looked like it would be a flatish close the market got a dose of viagra in the last 20 minutes of the day. Yesterday the VIX was in the red despite the fact that the market was in the red, usually this "fear" indicator should pop when markets go down over 2% like they did yesterday. Today the VIX declined again and is now below the 40 mark, just about where it stood at the Janurary top. Mind you, actual historical volatility has subsided quite a bit so this drop in the VIX is justifed to a degree, however, near the final stages of most bear market rally tops you tend to see this type of volatility crush.

It looks like "dumb money" is starting to buy the dip according to a couple of indicators I look at but I still see bottom picking attempts in FAZ and SRS by stubborn traders who I'm quite sure missed the boat on them earlier this year. I can tell this bottom picking is taking place by browsing blogs and message boards and by looking at the most popular tickers on stocktwits . FAZ has been most popular ticker mentioned day in and day out for weeks. Most of the people who post there are just gamblers in disguise and in due time I'm sure blow up their accounts. I can tell because I see certain people post frequently for a few weeks and then suddenly they are never to be seen again and I doubt it's because they got bored because whenever they make money they are sure to post their profits but you don't hear a peep when they lose.

My gameplan is to continue to do nothing until I see all the ducks line up. Either side of the market is dangerous to play right now. There's still a decent chance that the market will dip to 810 or so before making a final push higher. But this is just minutia guesswork. My main goal is to catch a big multi-week wave.

I'm 100% in cash. When this rally is over it may end the way the way it started i.e. a straight line because the market is quite compresed. Therefore, I will likely attempt to top pick this rally with an initial position of 30-50% depending on my conviction level at the time.