Buy The Dip, But Only When THIS Happens

Wait for SPY to hit THIS level first

August 06, 2024

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U.S. markets closed down by about 6% yesterday, and the VIX "fear gauge" spiked from 25 to 65 - a bigger spike than during the early days of COVID in 2020. Every major stock market index worldwide was down at least 1%. Japan's Nikkei 225 index led the pack, down 19.5% over three days.

It was a worldwide market panic. Headlines were full with doom and gloom.

Today, though, markets recovered. The Nikkei, Nasdaq, S&P, and Dow were all in the green, while the VIX fell back down to the 20s. So, naturally, the headlines flipped to "buy the dip."

Neither is good advice. This probably isn't another COVID-crash in the making.

But it's not an opportunity to buy the dip yet, either.

A core feature of 'Trading Waves' is the daily table-view post by Chris Capre. This cheat sheet is a compilation of his selected insights from the day's options flow data, offering perspectives that Chris employs for his trades.