Here is why I am buying this dip.
- I have looked at all of my overbought/oversold indicators, both the standard ones such as RSI2 and DV2, and some non-standard ob/os indicators. All of them are close to or are signaling buys.
- VIX jumped 26.6% today, closing slightly above where it closed when the Egypt news was breaking.
- SPY closed above the 20 day moving average.
- Breadth indicators, including number of stocks above their 5 day moving average and the decliners indicator, are giving buy signals. (see below).
It is easy to second guess the indicators and other signals that show the possibility of a bounce here. Sure, the unrest in the Middle East is a tad frightening. The problem is that second-guessing can become a bad habit. How many bounces over the last year would you have missed had you second-guessed your favorite indicators or not followed your rules?
As a bonus, here are some PDS picks for tomorrow, but they are not the top-ranked picks. I fully expect 65% or more of these to be closed for gains. If you want the sell signals, you’ll need to subscribe.
BECN
TIBX
SNCR
WYNN
JLL
KNL
CDNS
TWI
ATHN
NATI
Great post. I fully agree.
PDS rocks.
Thanks Flyseph. I love the late-night drive by blog hits. Old school.
Thanks for the post woodshedder. I was going to buy this dip tomorrow anyway, but it’s good to know doom is not inevitable.
Doom might be inevitable 😉 but the indicators don’t know it yet.
Woodshedder,
do you ever look at percentR, in order to confirm a “low risk” entry point?
if so, how does the current situtaion stack up?
thanks .. for the work I too bought this dip .. maybe a tad early