Tested Support Successfully

I wrote about the S&P 500 February yearly low support level of 1044.  Today we tested that level and preceded to bounce off quite hard to finish at 1074.  Click chart to view.

Testing support levels and bouncing off of them can be seen as a bullish sign and higher prices to come in the days or weeks to follow.  I expect to see a short rally (few days to weeks) then a resumption of the downtrend and the possibility of taking out the year low of 1040, so I don't feel the urgency to be buying stocks just yet.  Thank you for reading.
 

Buying the Dips

Since the March 2009 low, there have been 3 market corrections, with the current correction being -13.43%, high to low from April 26th to May 21st.  Buying the dips has been a very profitable strategy so far during these corrections as the market has made new highs later.

As long as we do not breach the 2010 low on the S&P 500 of 1044 the upward trend could still be maintained.  We are currently 3.95% higher from that yearly low.

At this time, the market pullback has created some potential opportunities in beaten down stocks.  Any buying of stocks will have to be done with risk controls in place in case the selling continues. Overall, I do feel there could be more downside for stocks in the weeks to come.  Thank you for reading.