In Bull market: one should Buy the Dips.
What does it mean to “buy the dip”?
“Buy the dip” means pretty much exactly as it sounds. It means buying the weakness and lowering average acquisition price in anticipation of a big move in the future. It also means one is of the opinion that any weakness or correction in the market is just temporary and eventually market will go higher.
We all have been hearing and witnessing how bullish S&P500 has been in 2013. Well just see how Buy the dips is working right now even on intra-day basis.
Here’s intra-day movement of Emini (S&P futures) of last 5 trading days:
August 07 2013:
Early morning sell off and then recovery
August 08 2013
The same happened on August 08 too. Early morning sell off and then recovery
August 09 2013
The same happened on August 09 too. Early morning sell off and then recovery
August 12 2013
There was a big gap down opening and then one way recovery. Today also market sold off in the morning only to recover in the second half
August 13 2013
What’s common in all the above charts:
Temporary Early morning weakness
Buy the dips crowd comes in
Takes the market higher rest of the trading day.
The best part is that above is happening with amazing consistency. That’s what happens in Bull market: Dip buyers are always active.
