Wednesday, September 23, 2009
Buy the Dip?
You have to remember the SPX is up about 90 points in 3 weeks from top to bottom and the rubber band is a bit stretched at this point. Markets usually mean revert to a sense of normalcy. Today's reversal merely brought us back to within a few points of the 8ema on the daily. I would expect the markets to test the 20ema as we get a potential multi-day dip here.
A 50% retracement of the move up since early Sept is 1034 and that area is also the site of some good support so I would not be surprised to see this area tested before the bulls come back into charge. I think this will be a great area to scoop up some more longs and buy the dip. Ultimately, I do think this market continues higher. But we will watch and determine that accordingly. For now the dollar could likely bounce a bit and commodities pullback, which further pressures stocks.