Heads up dip-buyers!
This is when you’re supposed to step in.
Because remember: the only “alpha” these days comes from buying dips and waiting on the “mean reversion” – and by “mean” we “mean” “green.”
FYI: Morgan Stanley says “go for it.”
You can count Morgan Stanley’s equity strategist Mike Wilson among those in the “buy the dip” camp. His team’s call is for the S&P 500 to hold at support in the 2,400-2,410 area before the index jumps to new highs by Labor Day. Part of his rationale is that the fundamental drivers of the bull market haven’t changed, but he throws in a rather counter-intuitive potential catalyst that’s interesting food for thought: last week’s political turbulence surrounding President Trump may have actually increased, rather than decreased, the odds of Congress passing tax cuts: “After all, they are ones up for reelection next year, not President Trump. They can denounce President Trump all they want but if they don’t get anything done, they will get the blame and likely be removed from office. There is a very good case to be made that the probability of Tax (cuts) may have gone up, not down, with last week’s events.”