The stock market’s “buy the dip” mentality is very strong right now.
The S&P 500’s pullbacks are becoming smaller and smaller, while the S&P 500 has started to break out.
Netflix tanked -13% yesterday on its earnings report after the market closed, but has clawed its way back to -5%.
As a result, the NASDAQ gapped down more than -0.6%, but reversed and closed at a new all-time high.
Here’s what happens next to the NASDAQ (historically) when the NASDAQ opens down at least -0.6% and closes at a 1 year high (i.e. reverses due to “buy the dip”)
Here’s what happens next to the S&P 500 (historically) when the NASDAQ opens down at least -0.6% and closes at a 1 year high.
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As you can see, the stock market usually continues to go up when its “buy the dip” mentality is strong.
This is a short term (2 weeks forward) bullish sign and medium-long term bullish sign. This study suggests that the S&P 500 will probably get close to making new all-time highs within the next few weeks.
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