With SPX gaping down over 50 points this morning, there was no way the bulls wouldn’t buy the dip.
To not do so, meant they would have to throw the towel in on this rally that has pushed higher incessantly since October. To not buy the dip means they would have to raise cash, and to not buy the dip would mean, that they would thereby concede ownership of this market to the bears.
If you truly believe in buying the dip, then a sell-off that pretty much wiped out all the market gains for January meant you had to do it today and at the open. And so far that is exactly what has happened. yeah the bulls are still down over 40 points on the day, but has yet to retest the lows of this morning, and as long as the Wuhan Coronavirus doesn’t create more hysteria in the coming days for the market, a gap is created in the market today that sets up to be filled later this week or next.
I’ve been busy so far today – some positions closed out, and some new ones added. I’ll be detailing all of it in my evening outlook post that I always do. But for now, keep an eye on the bounce plays off of long-term trend lines in Nvidia (NVDA) and Applied Materials (AMAT). Both are holding and both are bouncing.
Here’s the bullish watch-list for this week: