The 2018 S&P500 “double dip” looks very similar to the pullbacks in 2015 Aug/Sep and 2016 Jan/Feb. (see chart)
Today the S&P500 closed below the previous low close on February 9, 2018…but it did not exceed the intra-day low of February 9, nor did it drop completely to its 200 day-moving-average (as it did on February 9). Since this is a Friday, what usually happens is, retail investors will hear the bad news over the weekend…get really concerned and then sell on Monday…so we might see more lows early next week. But then in a few days, it’s April 1 and the start of a new quarter…markets will likely go back up.
I’m not good at picking exact bottoms. But here’s what I do know- if the market is in a long term upend, then a good entry point is a price below the 100dma (~S&P500 @ 2678). So rather than trying to exactly pick the bottom, I’d be happy getting in ANYWHERE below the 100dma.
I don’t believe we’re headed for a trade war. China’s RETALIATORY tariff response was a weak $3 billion…that’s .025% of their GDP and .016% of ours. Merely a rounding error.
So for me, if I had extra cash in my 401k, I’d be buying into major indexes & sectors like- S&P500, Technology, Banking, Healthcare, International and Emerging Markets. But that’s just me.
As always, invest with caution…and don’t miss the next episode of the Wealthsteading podcast which will be released this weekend.
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