Price Pattern Sentiment

This Weeks Tip: Buy on the Dip

Before we jump into it, just a shout out to our fantastic analyst team who correctly timed our move on selling out of Apple Inc. (AAPL).  After 14 months and an 80% profit we saw the stock drop almost 10% last week, as we said it would (please refer to our September 15, 2017 Newsletter).  If we haven’t said it enough, Bruce you are the man.

S&P 500

The S&P 500 jumped up on Monday to the resistance region we noted last week between 2506-2510 SPX. Though it has tested this level it several times, it still has not been able to overcome that resistance the all-last week.

Not much has stopped or slowed down the market’s upward trajectory over the last 18 months. In fact, even the dips have been much more shallow than standard dips we have seen in the past.
As we noted last week, even some of the worst weather events hitting the United States in decades and the threat of nuclear conflict with North Korea has not swayed the stock market from its strong rally.

Two weeks ago I spoke to a client who asked me about the coming signs of the end of the world on September 23, I thought he was talking about the upcoming potential budget deadlock and shutdown of the US government.

So I did a little research and sure enough last weekend, we were warned about a worldwide event, which will wreak havoc on the human race. David Meade, the author of “Planet X: The 2017 Arrival,” predicted that on Sept. 23 there will be “a magnificent sign in the skies over Jerusalem, a historical event signalling an upcoming ‘Tribulation Period’ of seven years.”

Meade also claimed that a “Planet X” will cause the “greatest catastrophic infliction of life upon mankind, since Noah’s Ark,” –of course referring to the biblical story of a great flood that wiped out much of the Earth and humanity. This Planet X will cause volcanic eruptions, a short stoppage of the Earth’s rotation, changes in climate, tidal waves and earthquakes.

Ok fair enough but as we have said many times before, exogenous events will not cause a change in the longer-term direction of the market. In fact in the past, we have cited many studies, which prove this point, based upon historical analysis of surprise news events (good and bad) and the corresponding market reactions.

So, while this apocalyptic event may trigger the market to pullback (which we have been expecting anyway), as long as we remain over the 2300SPX region support, the long-term rally will remain intact, and we expect the SPX to head up to the 2600 region.

Our, point here is that this market is heading to the 2600SPX region, and any sell-offs seen due to some apocalyptic event whether caused by man or God our advice will be a “buy on the dip” as the market continues to rally up to the 2600SPX region.