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Stock Market Investor “Buy the Dip” Mentality is Still Strong, Which is Bullish for Stocks

Stock-Markets / Stock Markets 2018 Jul 18, 2018 - 03:15 PM GMT

By: Troy_Bombardia

Stock-Markets

The stock market’s “buy the dip” mentality is very strong right now.

The S&P 500’s pullbacks are becoming smaller and smaller, while the S&P 500 has started to break out.


Netflix tanked -13% yesterday on its earnings report after the market closed, but has clawed its way back to -5%.

As a result, the NASDAQ gapped down more than -0.6%, but reversed and closed at a new all-time high.

Here’s what happens next to the NASDAQ (historically) when the NASDAQ opens down at least -0.6% and closes at a 1 year high (i.e. reverses due to “buy the dip”)

Here’s what happens next to the S&P 500 (historically) when the NASDAQ opens down at least -0.6% and closes at a 1 year high.

Click here to download the data

Conclusion

As you can see, the stock market usually continues to go up when its “buy the dip” mentality is strong.

This is a short term (2 weeks forward) bullish sign and medium-long term bullish sign. This study suggests that the S&P 500 will probably get close to making new all-time highs within the next few weeks.

Click here for more market studies.

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Copyright 2018 © Troy Bombardia - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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