Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Let Your Risk Tolerance Determine If You Buy the Dip

by September 24, 2022
September 24, 2022
Let Your Risk Tolerance Determine If You Buy the Dip

At its low on Friday, the Dow Jones closed below its June 17 low of 29,653. The S&P got within 11 points of its June low of 3636. The NASDAQ held above its June 17 low but still saw deep losses. All adding up to what? Buying opportunities, especially for those of you who think longer-term. And for those of you who have little tolerance for risk? Well, you should do fine as long as you stay disciplined.

For example, as you can see in the chart below, the S&P touched 3636 on June 17. At today’s low, the S&P got to within 11 points of that June low. On the flip side, the most recent high of 4325 on August 16 is now 18.5% above today’s low. Do I expect the S&P to get back to that 4325 level anytime soon? No. But I do like the outsized upside to downside reward to risk at current levels.

Note also in the above chart the RSI of 28.90 and stochastics close to zero, both flashing extreme oversold levels. In fact, look how the S&P bounced every time the RSI got down to or below the 30 level over the past year.

This is where discipline comes in. If we know the June 17 low of 3636 represents KEY price support, then we should be able to keep any losses to a minimum; i.e., a move below that level means it’s time to exit long positions for those with less risk tolerance. For those who care more about the long-term, you could be looking at some great opportunities — i.e., stocks that could make sizable moves — once the market settles down.

For example, look at the chart below on Advanced Micro Devices (AMD), a company that has continued to reiterate its financial strength and has fallen 60% since its November 2021 high. Do I think AMD is going to move back to that all time high any time soon? Of course not. But do I think that, over time, AMD could increase by 50%? I do. What if it takes a year to get there? So what? How many investments can you make that might produce a 50% return in a year?

This really is one of those rare times where you can have your cake and eat it too. There’s not much downside risk at today’s level on the S&P if you’re a short-term trader and keep a tight stop at that June 17 low on the S&P of 3636. If you’re a longer-term thinker, you’re getting a heavily discounted market. And if you’re looking to reduce risk even further, consider taking a partial position at today’s levels and adding on any further pullbacks, because,as we’ve seen time and time again, over time, the stock market produces tremendous gains.

In the meantime, if you would like to get access to timely and highly informative market insights from our Chief Market Strategist Tom Bowley, just click here and you will receive our EarningsBeats Digest every M, W and F FREE OF CHARGE! It’s a MUST-read!

At your service,

John Hopkins

EarningsBeats.com

0
FacebookTwitterGoogle +Pinterest
previous post
Kevin McCarthy Releases GOP Commitment to America – A Safe List of Platitudes that Is as Uninspiring as He Is Authentic – Did Frank Luntz Write This?
next post
Crooked Hillary Compares Trump Rallies to Hitler Rallies – Claims Trump Supporters Were Raising Arms in Nazi Salute (VIDEO)

You may also like

Market Research and Analysis – Part 3: Market...

March 28, 2024

The Usual Leaders Are Lagging

November 8, 2022

Week Ahead: Festive & Truncated Week May See...

October 23, 2022

Top Ten Charts for August: Two Bearish Turnaround...

August 23, 2024

Using the 4MA to Improve Timing

March 16, 2023

Peabody Energy Corp Leads the Energy Sector

November 29, 2022

Quantifying the Battle for the 200-day – It’s...

August 19, 2022

Top 10 Stocks to Watch in July 2024!

June 29, 2024

The Best Five Sectors, #11

March 17, 2025

Will NFLX Pierce Through Resistance With Breakthrough Earnings?...

April 17, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Hegseth tears up red tape, orders Pentagon to begin drone surge at Trump’s command

      July 10, 2025
    • SCOOP: Sen Ron Johnson readies subpoenas for FBI, DOJ in Butler shooting probe

      July 10, 2025
    • Jackson defends controversial, fiery SCOTUS dissents as telling people ‘how I feel’

      July 10, 2025
    • How to Find Compelling Charts in Every Sector

      July 10, 2025
    • AstroTurf Leads Innovation in Player Safety and Sustainability for Modern Sport

      July 10, 2025
    • Russia sanctions bill gains steam as White House appears to change tone on Putin

      July 10, 2025

    Categories

    • Business (8,444)
    • Investing (2,115)
    • Politics (16,000)
    • Stocks (3,199)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved