There is a very old saying: In Bull Market, Traders Buy the dips
When an index breaks out - that's a confirmed Bull Market and hence Buy the dips is a very rewarding strategy.
S&P500 broke out above 1550 in Feb-March 2013 and then rallied a distance before forming a base at 1810. It gave a clear signal back in Jan 2016 of its intent of making a bottom. I covered it back then -
The comfort of S&P500 https://t.co/yzggZY30Tz
— Deepak Singh (@smarket) January 24, 2016
Here's why S&P500 looked attractive back then:
Here's what S&P500 has done since then:
Nobody knows what market will do in the future but if one just follows the trend, then it can be very rewarding when things do turn out the way it's envisaged.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication, you agree to make no trade relying in whole or in part on the comments of the writers