With the markets in a recent freefall when should an investor get back into stocks? While no one can predict the exact bottom there are some key indicators that might help. Today the Relative Strength Index for the Dow Jones Industrial Average fell back into the 30’s. This is historically a good time to be buying stocks.
The Stock Market is at a crossroads will it hold its support level 16,000 and rally from here or move back down to August lows 15,500? Only time will tell but it does appear that we are at or near a prime opportunity to buy once again.
We could trade sideways for a few months but by year end we could still end up positive for the year. This trading pattern is very similar to 2011. Two years from now 16,000 for the Dow will look like a bargain.