With about a 50% run up since January, the stock market is poised for a dip. That is the conventional wisdom being touted by the analysts.
The idea is a good one, but what do you mean by a dip? This is where it experts disagree as usual. Let's take a sampling of some leading pundits:
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Sam Stovall, chief economist at Standard & Poor's, said: "But now (referring to continued high unemployment) that economic waters appear more choppy and third quarter earnings session is about to begin, are investors less inclined than they were a few weeks back to buy stocks on market dips?"
- Bruce McCain, chief market strategist at Key Private Bank (NYSE KEY) said: "With a 10% pullback, we would anticipate the market would find some sort of support and get going again."
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Rob Lutts, president and chief investment officer of Cabot Money Management says he won't be convinced the upside momentum can't be sustained until he sees the stock market finish 5% down from its September highs.
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Stuart Hoffman at PNC Wealth Managment thinks there is room on the downside. He says: "this is a bide-your-time period rather than jump back in at the first dip."
So there you have three experts who are waiting for a dip in the market before stepping up to the plate.
There is plenty of ready cash sitting on the sidelines ready to jump into this market, which would keep any dips from being too overdone. October is traditionally a choppy month, so you must be nimble and watch for a buy point somewhere below these levels. If you are asking where that point is, I don't know, nor does anyone else. The best strategy is to let the market tell you what to do.
As a guide, use the high point of the S&P 500 index, which was 1080.15. You can use any measure you choose from here to pick your buy point.
What is a good buy point in this market?
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