S&P500: Buy The Dip -Back Into Play?
The rhetoric for last year was certainly “Buy The Dip” - meaning, every time the stock market took a dip whether it be big or small was to simply buy it, regardless of the market sentiment or fundamental reasoning.
The biggest factor for the market currently is the trade deal and by market, I mean US indices as Trump cares most about this and it's his best barometer of how well he is doing. The president of the United States has propped the market up for a very long time now, every time the market took a turn last year a member of Trumps administration would seemingly come out and save the day by saying that “negotiations are going very well” the market would then turn on a dime, hence the rhetoric of “Buy The Dip”.
Just taking a look at the 4-hour chart below we can see how well this would have played out. 8 potential dips that could have been bought and our trend-line is supporting this thesis. Further confluence to this is our moving average, supporting price in our overall trending market. A caveat to this, however, is that trade tensions between both parties have escalated over the past week, with another round of tariffs being applied. We can see just how big of an impact that he has had on the market, dropping a couple of percent on these headlines.
I'll leave you with this, from the start of the year the S&P500 is up 15%, with several pullbacks and dips that could have been bought......