THE DIPS

The markets chopped around yesterday and probably chopped up many a day trader as the day started week rallied through most of the day and finished near the unchanged line.

As one can plainly see from the above chart, buying every dip in the SPX has worked great since mid June and most are probably expecting the success to continue through the end of the year. Strong seasonals and performance anxiety will probably keep the markets afloat until it doesn't.

My question is how long before the crummy economic news starts to impact stock prices and takes the lead from lower interest rates. I guess that is the million dollar question. In the meantime I expect folks will keep buying the dips till it stops working.