Dips are also relative to the current market environment. Typically, a dip buying signal is identified when longs are throwing up in the streets. These days, a dip is anything below yesterday's close.:eek:
A significant buyable dip is when the benchmark SPX retraces to its 40 day moving average. I consider that a full retracement dip with extra large profit potential. Another major dip I watch for is the OEX retracing to the its 40 day moving average. This has almost happened today. Usually the SPX and OEX dip to the 40 day moving average together, but the current retracement we are now experiencing is demonstrating the SPX is holding up much better than the OEX. Since the OEX is the largest 100 stocks in the SPX, this could possible hint of a change in leadership from super large caps to possibly different stock sectors of a smaller nature.