Buy The Dip? Experts React To Thursday’s Stock Market Plunge

One day doesn’t make a trend, but Thursday’s trading performance could spell worry for the market.

The Dow Jones Industrial Average fell more than 1,000 points and investors are scrambling to figure out if it’s a buy the dip opportunity or a reason to exit ahead of more losses…

Buy The Dip: From a historical perspective, markets are vulnerable to at least four pullbacks of 5% during a rebound period, Piper Sandler Chief Market Technician Craig Johnson said on CNBC. This pullback is one of those scenarios where investors should be buyers of the dip.

Johnson made the call to buy stocks near their lows in March based on the fact the S&P 500 was trading around 25% below a 40-week moving average. That has only happened five times since 1970 and each time it was followed with a V-recovery.

“Every single time you traded between 20, 25 percent below that 40-week moving average, on the advance up you have moved anywhere from 15 and 20 percent above the 40-week moving average before the advance is over,” Johnson said.

If history is any indication, the S&P 500 could rise between 3,450 and 3,600 before the move is “ultimately over and complete.”

‘Fine’ To Give Back Some Gains’: It’s “fine” for the stock market to give back some of its recent gains, Jim Cramer said on “Squawk Box.” Shares of…

Continue reading at BENZINGA.com

 

 

Leave a Reply

Your email address will not be published.