Friday morning trading demonstrated a great deal of movement within a tight range, with the S&P 500 (SPY) remaining up for the day but oscillating between 191.73 and 191.08. Many analysts and daytraders were expecting a bearish day; for instance, on the social site Stocktwits.com, bearish sentiment continued to grew from August 1st onwards. The more professional indicator of volatility, the CBOE’s VIX, spiked twice in the morning as more traders bought insurance on a market decline.

The significance of this trend is twofold. For one, SPY’s 90-day SMA has been between 191.19-191.34, and falling steadily with the overall bearish market of the past two weeks. Whether Friday ends up or down, the month-to-date decline has not seen a recovery and the anemic and oscillating gains in intraday trading do not indicate a bottom as much as uncertainty—a characteristic that the VIX also suggests.

In times of market uncertainty, VIX options are only one form of insurance. Many investors will fly to quality, sacrificing high-risk holdings for low-risk alternatives. The most popular of these is U.S. Treasuries, and TLT remained sharply up all morning, only growing over time. Short-term Treasuries also saw falling yields and rising prices; in total, the Bloomberg US Treasury Bond Index rose around a quarter of a percent in the morning.

As low-risk assets saw capital inflows, high-risk assets saw the opposite. High-growth darling Tesla (TSLA) was down over 2% in early morning trading on a clear bearish trend, remaining well below the 90-day SMA. The stock’s 12-day, 26-day MACD remained strongly negative. Similar action was seen with Netflix (NFLX), Pandora (P), and FireEye (FEYE), all hedge fund favorites that have already corrected twice in the year.

Catching a Falling Knife and Buying the Dip

In 2013, “buy the dip” was the catchphrase of the market, with any fall in the broader market representing little more than a buy opportunity. Unsurprisingly, long-only funds sharply outperformed short-only funds in that market, and investors continue to debate exactly why this happened.

The trend has continued in 2014, with late-January and early-February’s dip providing investors with a buying opportunity. A smaller dip in April provided a similar opportunity, and many investors are largely anticipating a similar trend now, with August’s correction providing a breather but not an end to the 5-year long bull market.

It is at this point that traders and analysts part ways. Analysts will suggest buying as bullish names fall below price targets or provide better multiples on lower prices, while traders will look for an indication that the market has fully bottomed and is beginning to recover.

The technical trader wants to buy the dip without catching a falling knife, which is partly why Friday morning’s action was so choppy; on the one hand, some macroeconomic stability in Ukraine and better U.S. economic data might indicate a better environment for investors, but on the other hand instability in the Middle East and the upcoming taper could simply reduce the total capital available for the stock market.

The real question, for those who believe we’ve hit a bottom and those who think there’s more decline to come, is determining whether today’s action is a sign of an upswing, or a continuation of the bullish trend. Since so many market participants are trying to determine this with differing views on the meaning of the data points available, we are seeing a tug of war play itself out in the price of SPY.