Buy on the Dips?---1/13/2017
My model shows that the next step of the market's progression is the climax of the Bull run we've been on since 2009. This part of the market generally last for several years and tends to become characterized by the Buy on the Dips mantra. What I mean by that is when the market sells off, market participants view that as a buying opportunity. The panic sellers fade away and opt to buy into the sell off instead. As this vibe begins to take over more and more investor's operating procedures, the market goes higher and higher. This "reflexive" action actually begins to fundamentally impact the market and business activity. After a bit of time has passed, everyone thinks they can be great investors because the market just goes up and up and up. And, of course, right about the time everyone has jumped in, the market realizes prices have been pushed to absurd levels as the sellers have taken a hiatus.
The key moving forward will be to watch investor's behavior during sell offs. Do they Buy the Dip or not?