The market's recent 45-day rocket ride was the longest uninterrupted climb without a triple digit decline since 2006 - until Tuesday when the Dow lost 203 points.
The sell-off begs the question: Should you buy the stock market dip?
First things first. The sky isn't falling even though there are a lot of investors who believe the worst after two tough days on Monday and Tuesday.
In fact, if you remember your recent history, we used to eat declines like these for breakfast. Two-hundred-point days were not uncommon. For that matter, neither were 400-point swings only a few years ago.
What investors need to realize is this: The stock market has come a long way in a hurry since establishing panic-driven lows on March 6, 2009.
The S&P 500, for example, has tacked more than 100%. Compared to those gains, Monday and Tuesday's losses are just rounding errors in the big scheme of things.
This means a portfolio worth $500,000 would be worth $1,000,000 today if it had been invested in something as plain vanilla as an S&P 500 Index fund only three years ago.
On that basis alone, I could make the case this is the pullback everybody has been waiting for.
But that's the problem...everybody is waiting on the same thing.
Waiting for a Stock Market Dip
According to various reports, most investors remain on the sidelines for reasons that are as obvious as they are self-evident - worries about debt, politics, jobs and the future dominate nearly every poll.
You can see that if you look at stock market volume.
It's down 50% since the financial crisis began. According to CNBC data, last Friday a mere 3.2 billion shares traded hands on the NYSE. Three years ago, that figure was 7.5 billion on an average day.
This complicates technical analysis because it limits the statistical validity of many analytics that might otherwise be functioning normally.
So what's a technical trader to do?...