For long-term investors, this is what you wait for.
These kinds of “resets” often create historic opportunities.
But the goal isn’t to catch a falling knife. The goal is to start buying on the way back up.
So how do we know when that’s happening?
One simple way is to look at the percentage of stocks above their 200-day moving average.
In this case, I’m using the S&P 1500 as it is a broad index that captures overall participation across large, mid, and small caps.
When the indicator drops below 15%, like it did yesterday, it usually means we’ve seen a washout.
That's when we start paying attention.
Then the signal to act comes when that percentage climbs back above 15%.
It might happen fast, or it might take time.
We’re not there yet. But when we are, that’s your trigger.
Let me know what you think!
Alfonso
P.S. If you're looking for a way to navigate a fast-moving market—whether it's trending up or down—the Breakout Multiplier strategy could offer a practical approach.
Steve recently shared a new trade idea post, walking through a setup we highlighted a couple of weeks ago.
