Ok, boys and girls its time to do the Buy-the-Dip dance. Tuesday's action gave us the bounce in our fast momentum indicator that we were looking for. This come along just as our all important slow momentum indicator was drifting downward, but still being pushed along in positive TradeWind territory. With our fast momentum indicator reload and ready to push high, we now will watch for the moderate momentum indicator to reach its bottom and turn higher gives a dual thrust to push us even further into the positive zone.
Now tomorrow you are going to read a lot about Intel's earning that came in after hours as being the catalyst for the market jump. Not so, say I. The momentum was positive all along and short term we had reached oversold, we were primed for a bounce. You might ask, if Intel had reported disappointing earning would that have broken my model. I answer, not necessarily. How many times have you seen a headline company report good or poorly and you think the market will follow that and it doesn't. Then you read all the reporters talking about how the market ignored this or that news. My answer to all of that is that the momentum indicators were set to go one way or the other. Good or bad news only juices the move. The GE news last Friday was a case in point, we were in consolidating mode, working over the overbought momentum, that news just made for a one day sharper move. Then the market caught itself and now the long side is going to reassert its momentum.
Check out our Top 25 lists and TradeWinds Black Box for ideas on what to buy on this dip.
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